| 1. | \rDESCRIPTION OF THE COMPANY |
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Richardson\rElectronics, Ltd. is a leading global provider of engineered solutions, power grid and microwave tubes and related consumables;\rpower conversion and RF and microwave components; high value flat panel detector solutions, replacement parts, tubes and service\rtraining for diagnostic imaging equipment; and customized display solutions. We serve customers in the alternative energy, healthcare,\raviation, broadcast, communications, industrial, marine, medical, military, scientific and semiconductor markets. The Company’s\rstrategy is to provide specialized technical expertise and “engineered solutions” based on our core engineering and\rmanufacturing capabilities. The Company provides solutions and adds value through design-in support, systems integration, prototype\rdesign and manufacturing, testing, logistics, and aftermarket technical service and repair through its global infrastructure.
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Our\rproducts include electron tubes and related components, microwave generators, subsystems used in semiconductor manufacturing,\rand visual technology solutions. These products are used to control, switch or amplify electrical power signals, or are used as\rdisplay devices in a variety of industrial, commercial, medical, and communication applications.
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During\rthe first quarter of fiscal 2015, we created a new strategic business unit called Richardson Healthcare (“Healthcare”).\rAs hospitals remain under pressure to reduce costs while serving a much larger customer base, there is a growing demand for independent\rsources of high-value replacement parts for diagnostic imaging. Having access to parts that are tested and in stock enables hospitals\rto terminate expensive service contracts with the Original Equipment Manufacturers (“OEM”) and instead use third party\rservice providers or in-house technicians. With our global infrastructure, technical sales team, and experience servicing the\rhealthcare market, we are well positioned to take advantage of this market opportunity. Over time, our plan is to expand our position\rfrom being the leader in power grid tubes to a key player in the high-growth, high-profile healthcare industry.
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We\rhave three operating and reportable segments, which we define as follows:
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The\rPower and Microwave Technologies Group (“PMT”), formerly called the Electron Device Group (“EDG”)\rprior to July 2015, provides engineered solutions and distributes electronic components to customers in alternative\renergy, aviation, broadcast, communications, industrial, marine, medical, military, scientific, and semiconductor markets.\rPMT focuses on various applications including broadcast transmission, CO2 laser cutting, diagnostic imaging, dielectric\rand induction heating, high energy transfer, high voltage switching, plasma, power conversion, radar, and radiation oncology.\rPMT also offers its customers technical services for both microwave and industrial equipment.
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Canvys\rprovides customized display solutions serving the corporate enterprise, financial, healthcare, industrial, and medical OEM\rmarkets.
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Healthcare\rmanufactures, refurbishes and distributes high value replacement parts for the healthcare market including hospitals, medical\rcenters, asset management companies, independent service organizations, and multi-vendor service providers. Products include Diagnostic\rImaging replacement parts including CT and MRI tubes, hydrogen thyratrons, klystrons, magnetrons; replacement flat panel detectors\rand upgrades; and additional replacement components currently under development for the diagnostic imaging service market. Through\ra combination of newly developed products and partnerships, service offerings, and training programs, we believe we can help our\rcustomers improve efficiency and deliver better clinical outcomes while lowering the cost of healthcare delivery.
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We\rcurrently have operations in the following major geographic regions: North America, Asia/Pacific, Europe, and Latin America.
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Customer\rConcentration: No one customer represented more than 10% of our total accounts receivable balance as of May 27, 2017.\rOne customer represented $3.8 million, or 15%, of our total accounts receivable balance, as of May 28, 2016. This receivable was\rcollected in the first month of our fiscal 2017. No one customer represented more than 10% of net sales for either fiscal 2017\ror fiscal 2016.
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Supplier\rConcentration: One of our suppliers represented 14% of our total cost of sales as of May 27, 2017, and 15% as of May\r28, 2016. The amount owed to this supplier was approximately $2.3 million as of May 27, 2017, and $2.2 million as of May 28, 2016.
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The\raccompanying consolidated financial statements have been prepared in accordance with U.S. GAAP for all fiscal years presented.
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The\rconsolidated financial statements include our wholly owned subsidiaries. All intercompany transactions and account balances have\rbeen eliminated in consolidation.
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Our\rfiscal year 2017 began on May 29, 2016, and ended on May 27, 2017. Unless otherwise noted, all references to a particular\ryear in this document shall mean our fiscal year.
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Use\rof Estimates: The preparation of financial statements in conformity with GAAP requires management to make significant estimates\rand assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities\rat the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Management\rcontinuously evaluates its critical accounting policies and estimates, including the allowance for doubtful accounts, revenue\rrecognition, inventory obsolescence, goodwill and other intangible assets, loss contingencies, and income taxes. Management bases\rthe estimates on historical experience and on various other assumptions believed to be reasonable under the circumstances, however,\ractual results could differ from those estimates.
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Fair\rValues of Financial Instruments: The fair values of financial instruments are determined based on quoted market prices and\rmarket interest rates as of the end of the reporting period. Our financial instruments include investments, accounts receivable,\raccounts payable, and accrued liabilities. The fair values of these financial instruments approximate carrying values at\rMay 27, 2017, and May 28, 2016.
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Cash\rand Cash Equivalents: We consider short-term, highly liquid investments that are readily convertible to known amounts\rof cash, and so near their maturity that they present insignificant risk of changes in value because of changes in interest rates,\rand that have a maturity of three months or less, when purchased, to be cash equivalents. The carrying amounts reported in the\rbalance sheet for cash and cash equivalents approximate the fair market value of these assets.
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Allowance\rfor Doubtful Accounts: Our allowance for doubtful accounts includes estimated losses that result from uncollectible receivables.\rThe estimates are influenced by the following: continuing credit evaluation of customers’ financial conditions; aging of\rreceivables, individually and in the aggregate; a large number of customers which are widely dispersed across geographic areas;\rcollectability and delinquency history by geographic area; and the fact that no single customer accounts for more than 10% of\rnet sales. Significant changes in one or more of these considerations may require adjustments affecting net income and net carrying\rvalue of accounts receivable. The allowance for doubtful accounts was approximately $0.4 million as of both May 27, 2017, and\ras of May 28, 2016.
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Loss\rContingencies: We accrue a liability for loss contingencies when it is probable that a liability has been incurred and the\ramount can be reasonably estimated. When only a range of possible loss can be established, the most probable amount in the range\ris accrued. If no amount within this range is a better estimate than any other amount within the range, the minimum amount in\rthe range is accrued. If we determine that there is at least a reasonable possibility that a loss may have been incurred, we will\rinclude a disclosure describing the contingency.
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Revenue\rRecognition: Our product sales are recognized as revenue upon shipment, when title passes to the customer, when delivery\rhas occurred or services have been rendered, and when collectability is reasonably assured. We also record estimated discounts\rand returns based on our historical experience. Our products are often manufactured to meet the specific design needs of our customers’\rapplications. Our engineers work closely with customers to ensure that our products will meet their needs. Our customers are under\rno obligation to compensate us for designing the products we sell.
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Foreign\rCurrency Translation: The functional currency is the local currency at all foreign locations, with the exception of Hong\rKong, which the functional currency is the US dollar. Balance sheet items for our foreign entities, included in our consolidated\rbalance sheet are translated into U.S. dollars at end-of-period spot rates. Gains and losses resulting from translation of foreign\rsubsidiary financial statements are credited or charged directly to accumulated other comprehensive income/(loss), a component\rof stockholders’ equity. Revenues and expenses are translated at the current rate on the date of the transaction. Gains\rand losses resulting from foreign currency transactions are included in income. Foreign currency translation reflected in our\rconsolidated statements of comprehensive loss was a loss of $0.6 million during fiscal 2017, a loss of $0.2 million during fiscal\r2016, and a gain of $0.2 million during fiscal 2015.
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Shipping\rand Handling Fees and Costs: Shipping and handling costs billed to customers are reported as revenue and the related\rcosts are reported as a component of cost of sales.
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Inventories,\rnet: Our worldwide inventories are stated at the lower of cost or market, generally using a weighted-average cost method.\rOur net inventories include approximately $36.0 million of finished goods, $5.3 million of raw materials, and $1.4 million of\rwork-in-progress as of May 27, 2017, as compared to approximately $40.0 million of finished goods, $4.4 million of raw materials,\rand $1.0 million of work-in-progress as of May 28, 2016. The inventory reserve as of May 27, 2017, was $3.5 million compared to\r$3.4 million as of May 28, 2016.
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Provisions\rfor obsolete or slow moving inventories are recorded based upon regular analysis of stock rotation privileges, obsolescence, the\rexiting of certain markets, and assumptions about future demand and market conditions. If future demand, changes in the industry,\ror market conditions differ from management’s estimates, additional provisions may be necessary.
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We\rrecorded provisions to our inventory reserves of $0.5 million, $0.7 million, and $0.2 million during fiscal 2017, 2016, and 2015,\rrespectively, which were included in cost of sales. The provisions were principally for obsolete and\rslow moving parts. The parts were written down to estimated realizable value.
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Income\rTaxes: We recognize deferred tax assets and liabilities based on the differences between financial statement carrying\ramounts and the tax bases of assets and liabilities. We regularly review our deferred tax assets for recoverability and determine\rthe need for a valuation allowance based on a number of factors, including both positive and negative evidence. These factors\rinclude historical taxable income or loss, projected future taxable income or loss, the expected timing of the reversals of existing\rtemporary differences, and the implementation of tax planning strategies. In circumstances where we, or any of our affiliates,\rhave incurred three years of cumulative losses which constitute significant negative evidence, positive evidence of equal or greater\rsignificance is needed to overcome the negative evidence before a tax benefit is recognized for deductible temporary differences\rand loss carryforwards.
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Investments:\rAs of May 27, 2017, we have invested in time deposits and certificates of deposit (“CD”) in the amount of $8.2\rmillion. Of this, $6.4 million mature in less than twelve months and $1.8 million mature in greater than twelve months. As of\rMay 28, 2016, we had approximately $9.5 million invested in time deposits and CD’s. Of this, $2.3 million mature in\rless than twelve months and $7.2 million mature in greater than twelve months. The fair value of these investments is the face\rvalue of each time deposit and CD.
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We\ralso have investments in equity securities, all of which are classified as available-for-sale and are carried at their fair value\rbased on quoted market prices. Our investments, which are included in non-current assets, had a carrying amount of $0.6 million\rat May 27, 2017 and at May 28, 2016. Proceeds from the sale of securities were $0.3 million during fiscal 2017, $0.3 million\rduring fiscal 2016 and $0.2 million during fiscal 2015. We reinvested proceeds from the sale of securities, and the cost of the\requity securities sold was based on a specific identification method. Gross realized gains and losses on those sales were less\rthan $0.1 million during fiscal 2017, 2016, and 2015. Net unrealized holding losses during fiscal 2017, 2016, and 2015, were less\rthan $0.1 million and have been included in accumulated comprehensive loss during its respective fiscal year.
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Discontinued\rOperations: During fiscal 2011, we completed the sale of the assets primarily used or held for use in, and certain liabilities\rof our RF, Wireless, and Power Division (“RFPD”), as well as certain other Company assets, including our information\rtechnology assets, to Arrow Electronics, Inc. (“Arrow”) in exchange for $238.8 million, (“the Transaction”).\rIn accordance with Accounting Standards Codification (“ASC”) 205-20, Presentation of Financial Statements - Discontinued\rOperations (“ASC 205-20”), we reported the financial results of RFPD as a discontinued operation.
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During\rfiscal 2017, the Company disposed of, by sale, the PACS Display business. Based on our assessment of the criteria that must be\rmet to qualify a disposal transaction as a discontinued operation set forth in Accounting Standards Update 2014-08, the disposal\rof the PACS Display business does not qualify as a discontinued operation.
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Goodwill\rand Other Intangible Assets: We test goodwill for impairment annually and whenever events or circumstances indicate an impairment\rmay have occurred, such as a significant adverse change in the business climate, loss of key personnel or a decision to sell or\rdispose of a reporting unit.
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During\rthe fourth quarter of each fiscal year, our goodwill balances are reviewed for impairment using the first day of our fourth quarter\ras the measurement date. If after reviewing the totality of events or circumstances as provided in ASU 2011-08 we determine that\rit is not likely that the fair value of a reporting unit exceeds its carrying amount, then we test for impairment through the\rapplication of a fair value based test. We estimate the fair value of each of our reporting units based on projected future operating\rresults, market approach, and discounted cash flows.
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Our\rgoodwill impairment testing follows the two-step process as defined in ASC 350. The first step in the process compares the fair\rvalue of the reporting unit to its carrying value. If the carrying value of the reporting unit exceeds its fair value, the second\rstep of the impairment test is performed to measure the amount of impairment loss to be recognized. In the second step, the fair\rvalue of the reporting unit resulting from the first step of the evaluation is allocated to the fair value of all of the assets\rand liabilities of the reporting unit in order to determine an implied goodwill value. This allocation is similar to the purchase\rprice allocation performed in purchase accounting. If the carrying amount of the goodwill reported exceeds the implied goodwill\rvalue, an impairment loss should be recognized in an amount equal to that excess.
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Intangible\rassets are initially recorded at their fair market values determined on quoted market prices in active markets, if available,\ror recognized valuation models. Intangible assets that have finite useful lives are amortized on a straight-line basis over their\ruseful lives. Our intangible assets represent the fair value for trade name, customer relationships, non-compete agreements, and\rtechnology acquired in connection with the acquisitions.
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Property,\rPlant and Equipment: Property, plant and equipment are stated at cost, net of accumulated depreciation. Improvements\rand replacements are capitalized while expenditures for maintenance and repairs are charged to expense as incurred. Provisions\rfor depreciation are computed using the straight-line method over the estimated useful life of the asset. Depreciation expense\rwas approximately $2.4 million, $2.0 million, and $1.7 million during fiscal 2017, 2016, and 2015, respectively. Property, plant\rand equipment consist of the following (in thousands):
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| \r | \r | May\r 27, 2017 | \r \r | \r | May\r 28, 2016 | \r |||
| Land\r and improvements | \r\r | $ | \r1,301 | \r\r | \r | $ | \r1,301 | \r|
| Buildings\r and improvements | \r\r | \r | 19,885 | \r\r | \r | \r | 19,023 | \r|
| Computer\r and communications equipment | \r\r | \r | 8,551 | \r\r | \r | \r | 6,810 | \r|
| Construction\r in progress | \r\r | \r | 2,063 | \r\r | \r | \r | 2,721 | \r|
| Machinery\r and other equipment | \r\r | \r | 10,387 | \r\r | \r | \r | 8,080 | \r|
| \r | \r | $ | \r42,187 | \r\r | \r | $ | \r37,935 | \r|
| Accumulated\r depreciation | \r\r | \r | (26,374 | \r) | \r\r | \r | (24,949 | \r) |
| Property,\r plant, and equipment, net | \r\r | $ | \r15,813 | \r\r | \r | $ | \r12,986 | \r
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Construction\rin progress includes $1.9 million related to our Healthcare growth initiatives. All projects are expected to be completed before\rthe end of fiscal 2018.
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Supplemental\rdisclosure information of the estimated useful life of the assets:
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| Land\r improvements | \r10 years |
| Buildings and improvements | \r10 - 30 years |
| Computer and communications\r equipment | \r3 - 10 years |
| Machinery and other\r equipment | \r3 - 10 years |
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We\rreview all property, plant, and equipment for impairment when events or changes in circumstances occur which indicate a possible\rimpairment may exist. We have concluded that our property, plant, and equipment as of May 27, 2017, were not impaired.
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Accrued\rLiabilities: Accrued liabilities consist of the following (in thousands):
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| \r | \r | May\r 27, 2017 | \r\r | \r | May\r 28, 2016 | \r|||
| Compensation\r and payroll taxes | \r\r | $ | \r3,250 | \r\r | \r | $ | \r3,404 | \r|
| Accrued\r severance (1) | \r\r | \r | 706 | \r\r | \r | \r | 650 | \r|
| Professional\r fees | \r\r | \r | 535 | \r\r | \r | \r | 775 | \r|
| Deferred\r revenue | \r\r | \r | 1,460 | \r\r | \r | \r | 1,879 | \r|
| Other\r accrued expenses | \r\r | \r | 2,360 | \r\r | \r | \r | 2,427 | \r|
| Accrued\r Liabilities | \r\r | $ | \r8,311 | \r\r | \r | $ | \r9,135 | \r
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(1) In\rthe second quarter of fiscal year 2017, the Company executed a reduction in headcount to streamline operations and reduce costs\rand recorded $1.3 million of expense included in selling, general and administrative expenses for employee termination costs payable\rto terminated employees with employment and/or separation agreements with the Company. The changes in the severance accrual\rfor fiscal year 2017 included provisions and payments of $1.3 million and $1.2 million, respectively.
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Warranties:\rWe offer warranties for the limited number of specific products we manufacture. We also provide extended warranties for some\rproducts we sell that lengthen the period of coverage specified in the manufacturer’s original warranty. Our warranty terms\rgenerally range from one to three years.
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We\restimate the cost to perform under the warranty obligation and recognize this estimated cost at the time of the related product\rsale. We record expense related to our warranty obligations as cost of sales in our consolidated statements of comprehensive loss.\rEach quarter, we assess actual warranty costs incurred on a product-by-product basis and compare the warranty costs to our estimated\rwarranty obligation. With respect to new products, estimates are based generally on knowledge of the products, the extended warranty\rperiod, and warranty experience.
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Warranty\rreserves are established for costs that are expected to be incurred after the sale and delivery of products under warranty. Warranty\rreserves are included in accrued liabilities on our consolidated balance sheets. The warranty reserves are determined based on\rknown product failures, historical experience, and other available evidence.
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Changes\rin the warranty reserve during fiscal 2017 and 2016 were as follows (in thousands):
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| \r | \r | Warranty\r Reserve | \r||
| Balance\r at May 30, 2015 | \r\r | $ | \r188 | \r|
| Accruals\r for products sold | \r\r | \r | 108 | \r|
| Utilization | \r\r | \r | (86 | \r) |
| Balance\r at May 28, 2016 | \r\r | $ | \r210 | \r|
| Accruals\r for products sold | \r\r | \r | 89 | \r|
| Utilization | \r\r | \r | (78 | \r) |
| Recovery | \r\r | \r | (115 | \r) |
| Balance\r at May 27, 2017 | \r\r | $ | \r106 | \r
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Other\rNon-Current Liabilities: Other non-current liabilities of $0.7 million at May 27, 2017, and $1.0 million at May 28,\r2016, primarily represent employee-benefits obligations in various non-US locations.
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Share-Based\rCompensation: We measure and recognize compensation cost at fair value for all share-based payments, including stock options.\rWe estimate fair value using the Black-Scholes option-pricing model, which requires assumptions such as expected volatility, risk-free\rinterest rate, expected life, and dividends. Compensation cost is recognized using a graded-vesting schedule over the applicable\rvesting period. Share-based compensation expense totaled approximately $0.4 million during fiscal 2017, $0.5 million during fiscal\r2016, and $0.7 million during fiscal 2015.
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Stock\roptions granted generally vest over a period of five years and have contractual terms to exercise of 10 years. A summary of stock\roption activity is as follows (in thousands, except option prices and years):
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| \r | \r | Number of Options | \r \r | \r | Weighted Average\r Exercise Price | \r \r | \r | Weighted Average\r Remaining Contractual Life | \r \r | \r | Aggregate Intrinsic\r Value | \r |||||
| Options Outstanding at\r May 31, 2014 | \r\r | \r | 1,065 | \r\r | \r | $ | \r10.37 | \r\r | \r | \r | \r | \r | \r | \r | \r | |
| Granted | \r\r | \r | 225 | \r\r | \r | \r | 9.92 | \r\r | \r | \r | \r | \r | \r | \r | \r | |
| Exercised | \r\r | \r | (47 | \r) | \r\r | \r | 6.53 | \r\r | \r | \r | \r | \r | \r | \r | \r | |
| Forfeited | \r\r | \r | (34 | \r) | \r\r | \r | 11.42 | \r\r | \r | \r | \r | \r | \r | \r | \r | |
| Cancelled | \r\r | \r | (72 | \r) | \r\r | \r | 11.19 | \r\r | \r | \r | \r | \r | \r | \r | \r | |
| Options Outstanding at May 30, 2015 | \r\r | \r | 1,137 | \r\r | \r | $ | \r10.35 | \r\r | \r | \r | \r | \r | \r | \r | \r | |
| Granted | \r\r | \r | 122 | \r\r | \r | \r | 5.88 | \r\r | \r | \r | \r | \r | \r | \r | \r | |
| Exercised | \r\r | \r | (28 | \r) | \r\r | \r | 5.18 | \r\r | \r | \r | \r | \r | \r | \r | \r | |
| Forfeited | \r\r | \r | (105 | \r) | \r\r | \r | 10.98 | \r\r | \r | \r | \r | \r | \r | \r | \r | |
| Cancelled | \r\r | \r | (107 | \r) | \r\r | \r | 9.97 | \r\r | \r | \r | \r | \r | \r | \r | \r | |
| Options Outstanding at May 28, 2016 | \r\r | \r | 1,019 | \r\r | \r | $ | \r9.93 | \r\r | \r | \r | \r | \r | \r | \r | \r | |
| Granted | \r\r | \r | 190 | \r\r | \r | \r | 6.90 | \r\r | \r | \r | \r | \r | \r | \r | \r | |
| Exercised | \r\r | \r | (5 | \r) | \r\r | \r | 5.61 | \r\r | \r | \r | \r | \r | \r | \r | \r | |
| Forfeited | \r\r | \r | (43 | \r) | \r\r | \r | 8.39 | \r\r | \r | \r | \r | \r | \r | \r | \r | |
| Cancelled | \r\r | \r | (88 | \r) | \r\r | \r | 11.17 | \r\r | \r | \r | \r | \r | \r | \r | \r | |
| Options Outstanding at May 27, 2017 | \r\r | \r | 1,073 | \r\r | \r | $ | \r9.38 | \r\r | \r | \r | 6.0 | \r\r | \r | $ | \r85 | \r|
| Options Vested at May 27, 2017 | \r\r | \r | 628 | \r\r | \r | $ | \r10.21 | \r\r | \r | \r | 4.4 | \r\r | \r | $ | \r68 | \r
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There\rwere 5,000 stock options exercised during fiscal 2017, with cash received of less than $0.1 million. The total intrinsic value\rof options exercised totaled less than $0.1 million during fiscal 2017 and 2016 and $0.2 million during fiscal 2015. The weighted\raverage fair value of stock option grants was $1.14 during fiscal 2017, $1.21 during fiscal 2016, and $3.71 during fiscal 2015.\rAs of May 27, 2017, total unrecognized compensation costs related to unvested stock options was approximately $0.9 million which\ris expected to be recognized over the remaining weighted average period of approximately three to four years. The total grant\rdate fair value of stock options vested during fiscal 2017 was $0.5 million.
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The\rfair value of stock options is estimated using the Black-Scholes option-pricing model with the following weighted average assumptions:
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| \r | \r | Fiscal\r Year Ended | \r||||||||||
| \r | \r | May\r 27, 2017 | \r \r | \r | May\r 28, 2016 | \r \r | \r | May\r 30, 2015 | \r ||||
| Expected\r volatility | \r\r | \r | 25.41 | \r% | \r\r | \r | 32.21 | \r% | \r\r | \r | 46.12 | \r% |
| Risk-free\r interest rate | \r\r | \r | 1.46 | \r% | \r\r | \r | 1.78 | \r% | \r\r | \r | 2.12 | \r% |
| Expected\r lives (years) | \r\r | \r | 6.50 | \r\r | \r | \r | 6.50 | \r\r | \r | \r | 6.47 | \r|
| Annual\r cash dividend | \r\r | $ | \r0.24 | \r\r | \r | $ | \r0.24 | \r\r | \r | $ | \r0.24 | \r
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The\rexpected volatility assumptions are based on historical experience commensurate with the expected term. The risk-free interest\rrate is based on the yield of a treasury note with a remaining term equal to the expected life of the stock option.
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The\rexpected stock option life assumption is based on the Securities and Exchange Commission’s (“SEC”) guidance\rin Staff Accounting Bulletin (“SAB”) No. 107 (“SAB No. 107”). On December 21, 2007, the\rSEC issued SAB No. 110 stating that they will continue to accept SAB No. 107, past the original expiration date of December 31,\r2007. For stock options granted during fiscal years 2017, 2016, and 2015, we believe that our historical stock option experience\rdoes not provide a reasonable basis upon which to estimate expected term. We utilized the Safe Harbor option, or Simplified Method,\rto determine the expected term of these options in accordance with SAB No. 107 for options granted. We intend to continue\rto utilize the Simplified Method for future grants in accordance with SAB No. 110 until such time that we believe that our\rhistorical stock option experience will provide a reasonable basis to estimate an expected term.
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The\rfollowing table summarizes information about stock options outstanding at May 27, 2017 (in thousands, except option prices\rand years):
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| \r | \r | \r | Outstanding | \r\r | \r | Vested | \r|||||||||||||||||||||||||||
| Exercise\r Price Range | \r\r | \r | Shares | \r\r | \r | Weighted\r Average Exercise Price | \r\r | \r | Weighted\r Average Life | \r\r | \r | Aggregate\r Intrinsic Value | \r \r | \r | Shares | \r\r | \r | Weighted\r Average Exercise Price | \r\r | \r | Weighted\r Average Life | \r\r | \r | Aggregate\r Intrinsic Value | \r |||||||||
| $5.03 to\r $8.58 | \r\r | \r | \r | 429 | \r\r | \r | $ | \r6.28 | \r\r | \r | \r | 6.5 | \r\r | \r | $ | \r85 | \r\r | \r | \r | 168 | \r\r | \r | $ | \r5.84 | \r\r | \r | \r | 2.6 | \r\r | \r | $ | \r68 | \r|
| $9.48 to $11.14 | \r\r | \r | \r | 350 | \r\r | \r | $ | \r10.50 | \r\r | \r | \r | 6.7 | \r\r | \r | $ | \r— | \r\r | \r | \r | 184 | \r\r | \r | $ | \r10.62 | \r\r | \r | \r | 6.5 | \r\r | \r | $ | \r— | \r|
| $11.50\r to $13.76 | \r\r | \r | \r | 294 | \r\r | \r | $ | \r12.55 | \r\r | \r | \r | 4.3 | \r\r | \r | $ | \r— | \r\r | \r | \r | 276 | \r\r | \r | $ | \r12.60 | \r\r | \r | \r | 4.2 | \r\r | \r | $ | \r— | \r|
| Total | \r\r | \r | \r | 1,073 | \r\r | \r | $ | \r9.38 | \r\r | \r | \r | 6.0 | \r\r | \r | $ | \r85 | \r\r | \r | \r | 628 | \r\r | \r | $ | \r10.21 | \r\r | \r | \r | 4.4 | \r\r | \r | $ | \r68 | \r
\r\r
As\rof May 27, 2017, we did not have any unvested restricted shares.
\r\r\r\r
Compensation\reffects arising from issuing stock awards have been charged against income and recorded as additional paid-in-capital in the consolidated\rstatements of stockholder’s equity during fiscal 2017, 2016, and 2015.
\r\r\r\r
The\rEmployees’ 2011 Long-Term Incentive Compensation Plan authorizes the issuance of up to 1,500,000 shares as incentive stock\roptions, non-qualified stock options, or stock awards. Under this plan, 850,000 shares are reserved for future issuance.\rThe Plan authorizes the granting of stock options at the fair market value at the date of grant. Generally, these options become\rexercisable over five years and expire up to 10 years from the date of grant.
\r\r\r\r
Earnings\rper Share: We have authorized 17,000,000 shares of common stock, and 3,000,000 shares of Class B common stock. The Class B\rcommon stock has 10 votes per share and has transferability restrictions; however, Class B common stock may be converted into\rcommon stock on a share-for-share basis at any time. With respect to dividends and distributions, shares of common stock and Class\rB common stock rank equally and have the same rights, except that Class B common stock cash dividends are limited to 90% of the\ramount of Class A common stock cash dividends.
\r\r\r\r
In\raccordance with ASC 260-10, Earnings Per Share (“ASC 260”), our Class B common stock is considered a participating\rsecurity requiring the use of the two-class method for the computation of basic and diluted earnings per share. The two-class\rcomputation method for each period reflects the cash dividends paid per share for each class of stock, plus the amount of allocated\rundistributed earnings per share computed using the participation percentage which reflects the dividend rights of each class\rof stock. Basic and diluted earnings per share were computed using the two-class method as prescribed in ASC 260. The shares of\rClass B common stock are considered to be participating convertible securities since the shares of Class B common stock are convertible\ron a share-for-share basis into shares of common stock and may participate in dividends with common stock according to a predetermined\rformula which is 90% of the amount of Class A common stock cash dividends.
\r\r\r\r
The\rper share amounts presented in the consolidated statements of comprehensive loss are based on the following (amounts in thousands,\rexcept per share amounts):
\r\r\r\r
| \r | \r | For\r the Fiscal Year Ended | \r||||||||||||||||||||||
| \r | \r | May\r 27, 2017 | \r\r | \r | May\r 28, 2016 | \r\r | \r | May\r 30, 2015 | \r||||||||||||||||
| \r | \r | Basic | \r\r | \r | Diluted | \r\r | \r | Basic | \r\r | \r | Diluted | \r\r | \r | Basic | \r\r | \r | Diluted | \r|||||||
| Numerator\r for Basic and Diluted EPS: | \r\r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | |
| Loss\r from continuing operations | \r\r | $ | \r(6,928 | \r) | \r\r | $ | \r(6,928 | \r) | \r\r | $ | \r(6,766 | \r) | \r\r | $ | \r(6,766 | \r) | \r\r | $ | \r(5,528 | \r) | \r\r | $ | \r(5,528 | \r) |
| Less\r dividends: | \r\r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | |
| Common\r stock | \r\r | \r | 2,567 | \r\r | \r | \r | 2,567 | \r\r | \r | \r | 2,615 | \r\r | \r | \r | 2,615 | \r\r | \r | \r | 2,794 | \r\r | \r | \r | 2,794 | \r|
| Class\r B common stock | \r\r | \r | 464 | \r\r | \r | \r | 464 | \r\r | \r | \r | 464 | \r\r | \r | \r | 464 | \r\r | \r | \r | 466 | \r\r | \r | \r | 466 | \r|
| Undistributed\r losses | \r\r | $ | \r(9,959 | \r) | \r\r | $ | \r(9,959 | \r) | \r\r | $ | \r(9,845 | \r) | \r\r | $ | \r(9,845 | \r) | \r\r | $ | \r(8,788 | \r) | \r\r | $ | \r(8,788 | \r) |
| Common\r stock undistributed losses | \r\r | $ | \r(8,440 | \r) | \r\r | $ | \r(8,440 | \r) | \r\r | $ | \r(8,367 | \r) | \r\r | $ | \r(8,367 | \r) | \r\r | $ | \r(7,539 | \r) | \r\r | $ | \r(7,539 | \r) |
| Class\r B common stock undistributed losses | \r\r | \r | (1,519 | \r) | \r\r | \r | (1,519 | \r) | \r\r | \r | (1,478 | \r) | \r\r | \r | (1,478 | \r) | \r\r | \r | (1,249 | \r) | \r\r | \r | (1,249 | \r) |
| Total\r undistributed losses | \r\r | $ | \r(9,959 | \r) | \r\r | $ | \r(9,959 | \r) | \r\r | $ | \r(9,845 | \r) | \r\r | $ | \r(9,845 | \r) | \r\r | $ | \r(8,788 | \r) | \r\r | $ | \r(8,788 | \r) |
| Loss\r from discontinued operations | \r\r | $ | \r— | \r\r | \r | $ | \r— | \r\r | \r | $ | \r— | \r\r | \r | $ | \r— | \r\r | \r | $ | \r(31 | \r) | \r\r | $ | \r(31 | \r) |
| Less\r dividends: | \r\r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | |
| Common\r stock | \r\r | \r | 2,567 | \r\r | \r | \r | 2,567 | \r\r | \r | \r | 2,615 | \r\r | \r | \r | 2,615 | \r\r | \r | \r | 2,794 | \r\r | \r | \r | 2,794 | \r|
| Class\r B common stock | \r\r | \r | 464 | \r\r | \r | \r | 464 | \r\r | \r | \r | 464 | \r\r | \r | \r | 464 | \r\r | \r | \r | 466 | \r\r | \r | \r | 466 | \r|
| Undistributed\r losses | \r\r | $ | \r(3,031 | \r) | \r\r | $ | \r(3,031 | \r) | \r\r | $ | \r(3,079 | \r) | \r\r | $ | \r(3,079 | \r) | \r\r | $ | \r(3,291 | \r) | \r\r | $ | \r(3,291 | \r) |
| Common\r stock undistributed losses | \r\r | $ | \r(2,567 | \r) | \r\r | $ | \r(2,567 | \r) | \r\r | $ | \r(2,615 | \r) | \r\r | $ | \r(2,615 | \r) | \r\r | $ | \r(2,823 | \r) | \r\r | $ | \r(2,823 | \r) |
| Class\r B common stock undistributed losses | \r\r | \r | (464 | \r) | \r\r | \r | (464 | \r) | \r\r | \r | (464 | \r) | \r\r | \r | (464 | \r) | \r\r | \r | (468 | \r) | \r\r | \r | (468 | \r) |
| Total\r undistributed losses | \r\r | $ | \r(3,031 | \r) | \r\r | $ | \r(3,031 | \r) | \r\r | $ | \r(3,079 | \r) | \r\r | $ | \r(3,079 | \r) | \r\r | $ | \r(3,291 | \r) | \r\r | $ | \r(3,291 | \r) |
| Net\r loss | \r\r | $ | \r(6,928 | \r) | \r\r | $ | \r(6,928 | \r) | \r\r | $ | \r(6,766 | \r) | \r\r | $ | \r(6,766 | \r) | \r\r | $ | \r(5,559 | \r) | \r\r | $ | \r(5,559 | \r) |
| Less\r dividends: | \r\r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | |
| Common\r stock | \r\r | \r | 2,567 | \r\r | \r | \r | 2,567 | \r\r | \r | \r | 2,615 | \r\r | \r | \r | 2,615 | \r\r | \r | \r | 2,794 | \r\r | \r | \r | 2,794 | \r|
| Class\r B common stock | \r\r | \r | 464 | \r\r | \r | \r | 464 | \r\r | \r | \r | 464 | \r\r | \r | \r | 464 | \r\r | \r | \r | 466 | \r\r | \r | \r | 466 | \r|
| Undistributed\r losses | \r\r | $ | \r(9,959 | \r) | \r\r | $ | \r(9,959 | \r) | \r\r | $ | \r(9,845 | \r) | \r\r | $ | \r(9,845 | \r) | \r\r | $ | \r(8,819 | \r) | \r\r | $ | \r(8,819 | \r) |
| Common\r stock undistributed losses | \r\r | $ | \r(8,440 | \r) | \r\r | $ | \r(8,440 | \r) | \r\r | $ | \r(8,367 | \r) | \r\r | $ | \r(8,367 | \r) | \r\r | $ | \r(7,565 | \r) | \r\r | $ | \r(7,565 | \r) |
| Class\r B common stock undistributed losses | \r\r | \r | (1,519 | \r) | \r\r | \r | (1,519 | \r) | \r\r | \r | (1,478 | \r) | \r\r | \r | (1,478 | \r) | \r\r | \r | (1,254 | \r) | \r\r | \r | (1,254 | \r) |
| Total\r undistributed losses | \r\r | $ | \r(9,959 | \r) | \r\r | $ | \r(9,959 | \r) | \r\r | $ | \r(9,845 | \r) | \r\r | $ | \r(9,845 | \r) | \r\r | $ | \r(8,819 | \r) | \r\r | $ | \r(8,819 | \r) |
| Denominator\r for Basic and Diluted EPS: | \r\r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | |
| Common\r stock weighted average shares | \r\r | \r | 10,705 | \r\r | \r | \r | 10,705 | \r\r | \r | \r | 10,908 | \r\r | \r | \r | 10,908 | \r\r | \r | \r | 11,682 | \r\r | \r | \r | 11,682 | \r|
| Class\r B common stock weighted average shares, and shares under if-converted method for diluted EPS | \r\r | \r | 2,140 | \r\r | \r | \r | 2,140 | \r\r | \r | \r | 2,141 | \r\r | \r | \r | 2,141 | \r\r | \r | \r | 2,151 | \r\r | \r | \r | 2,151 | \r|
| Effect\r of dilutive stock options | \r\r | \r | \r | \r | \r | \r | — | \r\r | \r | \r | \r | \r | \r | \r | — | \r\r | \r | \r | \r | \r | \r | \r | — | \r|
| Denominator\r for diluted EPS adjusted for weighted average shares and assumed conversions | \r\r | \r | \r | \r | \r | \r | 12,845 | \r\r | \r | \r | \r | \r | \r | \r | 13,049 | \r\r | \r | \r | \r | \r | \r | \r | 13,833 | \r|
| Loss\r from continuing operations per share: | \r\r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | |
| Common\r stock | \r\r | $ | \r(0.55 | \r) | \r\r | $ | \r(0.55 | \r) | \r\r | $ | \r(0.53 | \r) | \r\r | $ | \r(0.53 | \r) | \r\r | $ | \r(0.41 | \r) | \r\r | $ | \r(0.41 | \r) |
| Class\r B common stock | \r\r | $ | \r(0.49 | \r) | \r\r | $ | \r(0.49 | \r) | \r\r | $ | \r(0.47 | \r) | \r\r | $ | \r(0.47 | \r) | \r\r | $ | \r(0.36 | \r) | \r\r | $ | \r(0.36 | \r) |
| Income\r from discontinued operations per share: | \r\r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | |
| Common\r stock | \r\r | $ | \r— | \r\r | \r | $ | \r— | \r\r | \r | $ | \r— | \r\r | \r | $ | \r— | \r\r | \r | $ | \r— | \r\r | \r | $ | \r— | \r|
| Class\r B common stock | \r\r | $ | \r— | \r\r | \r | $ | \r— | \r\r | \r | $ | \r— | \r\r | \r | $ | \r— | \r\r | \r | $ | \r— | \r\r | \r | $ | \r— | \r|
| Net\r loss per share: | \r\r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | |
| Common\r stock | \r\r | $ | \r(0.55 | \r) | \r\r | $ | \r(0.55 | \r) | \r\r | $ | \r(0.53 | \r) | \r\r | $ | \r(0.53 | \r) | \r\r | $ | \r(0.41 | \r) | \r\r | $ | \r(0.41 | \r) |
| Class\r B common stock | \r\r | $ | \r(0.49 | \r) | \r\r | $ | \r(0.49 | \r) | \r\r | $ | \r(0.47 | \r) | \r\r | $ | \r(0.47 | \r) | \r\r | $ | \r(0.36 | \r) | \r\r | $ | \r(0.36 | \r) |
\r\r
Note:\rCommon stock options that were anti-dilutive and not included in diluted earnings per common share for fiscal 2017, fiscal 2016,\rand fiscal 2015 were 848; 890; and 881 respectively.
\r\r\r\r
New Accounting Pronouncements
\r\r
In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2014-09 (“ASU 2014-09”), Revenue from Contracts with Customers, which amends guidance for revenue recognition. ASU 2014-09 is principles based guidance that can be applied to all contracts with customers, enhancing comparability of revenue recognition practices across entities, industries, jurisdictions and capital markets. The core principle of the guidance is that entities should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods and services. The guidance details the steps entities should apply to achieve the core principle. In August 2015, the FASB issued an amendment to defer the effective date for all entities by one year. For public entities, ASU 2014-09 is effective for annual reporting periods beginning after December 15, 2017, including interim periods within that reporting period. Early adoption is permitted as of annual reporting periods beginning after December 15, 2016. Companies have the option of using either a full or modified retrospective approach in applying this standard. During fiscal 2016 and 2017, the FASB issued four additional updates which further clarify the guidance provided in ASU 2014-09.
\r\r
We are evaluating the impact of the new standard on our financial statements using a three-phase approach (assessment, conversion and implementation). We are in our primary assessment stage, which included identifying revenue streams, contracts and responsible parties who create and manage those accounts, quantifying the impact of identified contracts on the financial statements and identifying internal control changes. We are in the initial stage of our assessment phase and therefore further evaluation is needed to determine the impact on our financial statements, related disclosures and controls upon adoption. We expect to finalize the primary assessment phase in the first quarter of fiscal 2018. We will complete the conversion and implementation phases during fiscal 2018 in conjunction with future interpretative guidance.
\r\r
In July 2015, the FASB issued ASU No. 2015-11 (“ASU 2015-11”), Simplifying the Measurement of Inventory. ASU 2015-11 requires inventory within the scope of the ASU (e.g., first-in, first-out (“FIFO”) or average cost) to be measured using the lower of cost and net realizable value. Inventory excluded from the scope of the ASU (i.e., last-in, first-out (“LIFO”) or the retail inventory method) will continue to be measured at the lower of cost or market. The ASU also amends some of the other guidance in Topic 330, “Inventory,” to more clearly articulate the requirements for the measurement and disclosure of inventory. However, those amendments are not intended to result in any changes to current practice. ASU 2015-11 is effective for annual periods beginning after December 15, 2016, and interim periods within those annual periods. The Company does not expect adoption of ASU 2015-11 to have a material impact on the Company’s consolidated financial statements.
\r\r
In November 2015, the FASB issued ASU No. 2015-17, Income Taxes (Topic 740): Balance Sheet Classification of Deferred Taxes. ASU 2015-17 eliminates the prior US GAAP guidance in Topic 740, Income Taxes, that required an entity to separate deferred tax liabilities and assets between current and noncurrent amounts in a classified balance sheet. The amendments in ASU 2015-17 require that all deferred tax liabilities and assets of the same tax jurisdiction or a tax filing group, as well as any related valuation allowance, be offset and presented as a single noncurrent amount in a classified balance sheet. ASU 2015-17 is effective for annual periods beginning after December 15, 2016, and interim periods within those annual periods. In order to simplify presentation of deferred tax balances, the Company adopted this standard prospectively in the quarter ended August 27, 2016, which did not have a material impact on the Company’s results of operations, cash flows or stockholders’ equity. Periods prior to August 27, 2016 were not retrospectively adjusted.
\r\r
In February 2016, the FASB issued ASU\r2016-02 (“ASU 2016-02”), Leases. ASU 2016-02 establishes a right-of-use (“ROU”) model that requires\ra lessee to record an ROU asset and a lease liability on the balance sheet for all leases with terms longer than 12 months. Leases\rwill be classified as either finance or operating, with classification affecting the pattern of expense recognition in the income\rstatement. ASU 2016-02 is effective for fiscal years beginning after December 15, 2018, including interim periods within those\rfiscal years. A modified retrospective transition approach is required for lessees for capital and operating leases existing at,\ror entered into after, the beginning of the earliest comparative period presented in the financial statements, with certain practical\rexpedients available. The Company is currently evaluating the potential impact of the adoption of ASU 2016-02 on the Company’s\rconsolidated financial statements. Upon adoption, the Company expects that the amounts recognized for the ROU asset and lease\rliability in the balance sheets may be material.
\r \r\r
In March 2016, the FASB issued ASU 2016-09 (“ASU 2016-09”), Compensation - Stock Compensation: Improvements to Employee Share-Based Payment Accounting. ASU 2016-09 introduces targeted amendments intended to simplify the accounting for stock compensation. ASU 2016-09 will directly impact the tax administration of equity plans. ASU 2016-09 is effective for annual periods beginning after December 15, 2016, and interim periods within those annual periods. Early adoption is permitted and any adjustments should be reflected as of the beginning of the fiscal year that includes that interim period. The Company expects to adopt ASU 2016-09 in the first quarter of fiscal 2018, at which time we will evaluate the potential impact of the adoption of this standard on the Company’s consolidated financial statements.
\r\r
In August 2016, the FASB issued ASU No. 2016-15 (“ASU 2016-15”), Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments. ASU 2016-15 will make eight targeted changes to how cash receipts and cash payments are presented and classified in the statement of cash flows. ASU 2016-15 is effective for fiscal years beginning after December 15, 2017. The new standard will require adoption on a retrospective basis unless it is impracticable to apply, in which case it would be required to apply the amendments prospectively as of the earliest date practicable. The Company is currently in the process of evaluating the impact of adoption on its consolidated financial statements.
\r\r
In January 2017, the FASB issued ASU No. 2017-04 (“ASU 2017-04”), Simplifying the Test for Goodwill Impairment. ASU 2017-04 eliminates step 2 from the goodwill impairment test. As amended, the goodwill impairment test will consist of one step comparing the fair value of a reporting unit with its carrying amount. An entity should recognize a goodwill impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value. An entity may still perform the optional qualitative assessment for a reporting unit to determine if it is more likely than not that goodwill is impaired. ASU 2017-04 will be effective for fiscal years and interim periods beginning after December 15, 2019. ASU 2017-04 is required to be applied prospectively and early adoption is permitted for interim or annual goodwill impairment tests performed on testing dates after January 1, 2017. The Company is currently in the process of evaluating the impact of adoption on its consolidated financial statements.
"}]},{"name":"rpt:f-389","factDimensions":{"xbrl:concept":"us-gaap:BusinessCombinationDisclosureTextBlock","xbrl:period":"2016-05-29T00:00:00/2017-05-28T00:00:00","xbrl:entity":"cik:0000355948"},"factValues":[{"value":"| 4. | \rACQUISITION |
\r\r
On\rJune 15, 2015, Richardson Electronics, Ltd (“the Company”), acquired certain assets of International Medical Equipment\rand Services, Inc. (“IMES”), for a purchase price of $12.2 million. This includes the purchase of inventory, receivables,\rfixed assets, and certain other assets of the Company. The Company did not acquire any liabilities of IMES. The total consideration\rpaid excludes transaction costs.
\r\r\r\r
IMES,\rbased in South Carolina, provides reliable, cost-saving solutions worldwide for major brands of CT and MRI equipment. This acquisition\rpositions Richardson Healthcare to provide cost effective diagnostic imaging replacement parts and training to hospitals, diagnostic\rimaging centers, medical institutions, and independent service organizations. IMES offers an extensive selection of replacement\rparts, as well as an interactive training center, on-site test bays and experienced technicians who provide 24/7 customer support.\rReplacement parts are readily available and triple tested to provide peace of mind when uptime is critical. IMES core operations\rhave remained in South Carolina. Richardson Healthcare plans to expand IMES’ replacement parts and training offerings geographically\rto leverage the Company’s global infrastructure. During the fourth quarter of fiscal 2016, IMES opened up their first foreign\rlocation in Amsterdam.
\r\r\r\r
The\rconsideration paid by the Company to IMES at closing was $12.2 million in cash. The following table summarizes the fair values\rof the assets acquired at the date of the closing of the acquisition (in thousands):
\r\r\r\r
| Accounts\r receivable | \r\r | $ | \r737 | \r|
| Inventories | \r\r | \r | 1,420 | \r|
| Property,\r plant and equipment | \r\r | \r | 230 | \r|
| Goodwill | \r\r | \r | 6,332 | \r|
| Other\r intangibles | \r\r | \r | 3,490 | \r|
| Net\r assets acquired | \r\r | $ | \r12,209 | \r
\r\r
Intangible\rassets include trade names with an estimated life of 3 years for $0.6 million, customer relationships with an estimated life of\r20 years for $2.5 million, non-compete agreements with an estimated life of 5 years for $0.2 million, and technology with an estimated\rlife of 10 years for $0.2 million.
\r\r\r\r
Goodwill\rrecognized represents value the Company expects to be created by combining the operations of IMES with the Company’s operations,\rincluding the expansion into markets within existing business segments and geographic regions, access to new customers and potential\rcost savings and synergies.
\r\r\r\r
Goodwill\rrelated to the acquisition is deductible for tax purposes.
\r\r\r\r
In\rconnection with the acquisition of IMES, the Company also entered into an Employment, Non-Disclosure, and Non-Compete Agreement\r(“Employment Agreement”) with Lee A. McIntyre III as the Company’s Executive Vice President, IMES. During the\rterm of his employment, Mr. McIntyre will earn an annual base salary of $300,000. In addition to his base salary, he will be entitled\rto an annual bonus equal to 20% of the EBITDA of IMES provided that the EBITDA of the business is at least $2.0 million inclusive\rof the bonus payment. The annual bonus payment will terminate after five years. For fiscal year 2017, Lee McIntyre did not receive\ra bonus as the minimum EBITDA needed was not achieved.
\r\r\r\r
The\rfollowing unaudited pro forma information represents the Company’s results of operations as if the acquisitions had occurred\ras of June 1, 2014:
\r\r\r\r
| $ in\r thousands, except per share amounts | \r\r | For\r the year ended May 30, 2015 | \r ||
| Net\r sales | \r\r | $ | \r145,136 | \r|
| Net\r loss | \r\r | $ | \r(3,666 | \r) |
| Earnings\r per share: | \r\r | \r | \r | |
| Common\r shares - Basic | \r\r | $ | \r(0.27 | \r) |
| Class\r B common shares - Basic | \r\r | $ | \r(0.24 | \r) |
| Common\r shares - Diluted | \r\r | $ | \r(0.27 | \r) |
| Class\r B common shares - Diluted | \r\r | $ | \r(0.24 | \r) |
\r\r
The\rpro forma results have been prepared for informational purposes only and include adjustments to amortize acquired intangible assets\rwith finite life and reflect foregone interest income on cash paid for the acquisitions. These pro forma results do not purport\rto be indicative of the results of operations that would have occurred had the purchases been made as of the beginning of the\rperiods presented or of the results of operations that may occur in the future. The financial results for the fiscal year ended\rMay 28, 2016, includes the financial results for IMES from June 15, 2015, through May 28, 2016. The financial transactions for\rIMES from May 31, 2015, through June 14, 2015, were deemed immaterial for illustrating pro forma financial statements. IMES net\rsales were $7.9 million and $7.6 million for fiscal 2017 and fiscal 2016, respectively. The gross profit was $3.7 million and\r$4.4 million, or 46.5% and 57.2% of net sales during fiscal 2017 and fiscal 2016, respectively.
"}]},{"name":"rpt:f-390","factDimensions":{"xbrl:concept":"us-gaap:DisposalGroupsIncludingDiscontinuedOperationsDisclosureTextBlock","xbrl:period":"2016-05-29T00:00:00/2017-05-28T00:00:00","xbrl:entity":"cik:0000355948"},"factValues":[{"value":"| 5. | \rDISCONTINUED OPERATIONS |
\r\r
There\rwere no discontinued operations in either fiscal year 2017 or fiscal year 2016. In fiscal year 2015, the Company recorded an income\rtax provision of less than $0.1 million due to an income tax audit as a result of the Transaction.
"}]},{"name":"rpt:f-391","factDimensions":{"xbrl:concept":"us-gaap:RelatedPartyTransactionsDisclosureTextBlock","xbrl:period":"2016-05-29T00:00:00/2017-05-28T00:00:00","xbrl:entity":"cik:0000355948"},"factValues":[{"value":"| 6. | \rRELATED PARTY TRANSACTION |
\r\r
On\rJune 15, 2015, the Company entered into a lease agreement for the IMES facility with LDL, LLC. The Executive Vice President of\rIMES, Lee A. McIntyre III (former owner of IMES), has an ownership interest in LDL, LLC. The lease agreement provides for monthly\rpayments over five years with total future minimum lease payments of $0.4 million. Rental expense related to this lease amounted\rto $0.1 million for the fiscal years ended May 27, 2017 and May 28, 2016. The Company shall be entitled to extend the term of\rthe lease for a period of an additional five years by notifying the landlord in writing of its intention to do so within nine\rmonths of the expiration of the initial term.
\r\r\r\r\r\r
On October 16, 2014, the Company repurchased\r50,000 Class B shares from the Richardson Wildlife Foundation, an Illinois not-for-profit corporation, at a negotiated price of\r$9.91 per share. Edward Richardson, Chairman and CEO of the Company, also serves as President of the Richardson Wildlife Foundation.\rThese shares were repurchased pursuant to the Company’s share repurchase authorization approved by its Board of Directors.\rMr. Richardson filed a Form 4 to record the gifting of his Class B shares.
\r\r\r\r"}]},{"name":"rpt:f-392","factDimensions":{"xbrl:concept":"us-gaap:GoodwillAndIntangibleAssetsDisclosureTextBlock","xbrl:period":"2016-05-29T00:00:00/2017-05-28T00:00:00","xbrl:entity":"cik:0000355948"},"factValues":[{"value":"
| 7. | \rGOODWILL AND INTANGIBLE ASSETS |
\r\r
Goodwill
\r\r\r\r
There\rwas $6.3 million of goodwill reported on our balance sheet at both May 27, 2017 and May 28, 2016. The goodwill balance in its\rentirety relates to our IMES reporting unit which is included in the Healthcare segment.
\r\r\r\r
Goodwill\ris initially recorded based on the premium paid for acquisitions and is subsequently tested for impairment, using the first day\rof our fourth quarter as the measurement date. We test goodwill for impairment annually and whenever events or circumstances indicates\ran impairment may have occurred, such as a significant adverse change in the business climate, loss of key personnel or a decision\rto sell or dispose of a reporting unit.
\r\r\r\r
After\rreviewing the totality of events or circumstances as provided in ASU 2011-08, we determined that it was not more likely than not\rthat the fair value for the IMES reporting unit exceeded its carrying value. Accordingly, the first step of the two step goodwill\rimpairment test as described in FASB ASC 350-20-35 was performed. We performed the first step of the two step impairment test\rusing the income method, which is based on a discounted future cash flow approach that uses the significant assumptions of projected\rrevenue, projected operational profit, terminal growth rates, and the cost of capital.
\r\r\r\r
The\rresults of our goodwill impairment test as of February 26, 2017 indicated that the value of goodwill attributed to our IMES reporting\runit was not impaired. Since the acquisition of IMES in June 2015, there have been no fundamental changes in the business or market\rthat would indicate a significant decline in the fair value since the acquisition date. In the two years since acquisition, the\rCompany has made significant investments in the IMES business, including $6 million in capital expenditures that are expected\rto increase IMES’ product offerings and result in increased future sales, operating profit and cash flows.
\r\r\r\r
Management’s\rprojections used to estimate the undiscounted cash flows included increasing sales volumes from new product offerings being developed\rand expanded sales into new geographies and operational improvements designed to reduce costs. Changes in any of the significant\rassumptions used, including if the Company does not successfully achieve its operating plan, which is dependent on the creation\rof new product offerings, can materially affect the expected cash flows, and such impacts could result in a material non-cash\rimpairment charge of goodwill and other long lived assets.
\r\r\r\r
Although\rwe believe our projected future operating results and cash flows and related estimates regarding fair values are based on reasonable\rassumptions, historically, projected operating results and cash flows have not always been achieved.
\r\r\r\r
Intangible\rAssets
\r\r\r\r
Intangible\rassets are initially recorded at their fair market values determined on quoted market prices in active markets, if available,\ror recognized valuation models. Intangible assets that have finite useful lives are amortized over their useful lives and are\rtested for impairment when events or changes in circumstances occur that indicate possible impairment.
\r\r\r\r
Our\rintangible assets represent the fair value for trade name, customer relationships, non-compete agreements, and technology acquired\rin connection with our acquisitions. Intangible assets subject to amortization as well as amortization expense are as follows\r(in thousands):
\r\r\r\r
| \r | \r | Intangible Assets Subject\r to Amortization as of | \r ||||||
| \r | \r | May\r 27, 2017 | \r \r | \r | May\r 28, 2016 | \r |||
| Gross\r Amounts: | \r\r | \r | \r | \r | \r | \r | \r | |
| Trade\r Name | \r\r | $ | \r659 | \r\r | \r | $ | \r659 | \r|
| Customer\r Relationships | \r\r | \r | 3,397 | \r\r | \r | \r | 3,434 | \r|
| Non-compete\r Agreements | \r\r | \r | 177 | \r\r | \r | \r | 177 | \r|
| Technology | \r\r | \r | 230 | \r\r | \r | \r | 230 | \r|
| Total\r Gross Amounts | \r\r | $ | \r4,463 | \r\r | \r | $ | \r4,500 | \r|
| Accumulated\r Amortization: | \r\r | \r | \r | \r | \r | \r | \r | |
| Trade\r Name | \r\r | $ | \r441 | \r\r | \r | $ | \r231 | \r|
| Customer\r Relationships | \r\r | \r | 446 | \r\r | \r | \r | 374 | \r|
| Non-compete\r Agreements | \r\r | \r | 84 | \r\r | \r | \r | 55 | \r|
| Technology | \r\r | \r | 51 | \r\r | \r | \r | 22 | \r|
| Total\r Accumulated Amortization | \r\r | $ | \r1,022 | \r\r | \r | $ | \r682 | \r|
| \r | \r | \r | \r | \r | \r | \r | \r | |
| Net\r Intangibles | \r\r | $ | \r3,441 | \r\r | \r | $ | \r3,818 | \r
\r\r
We\rdetermined that intangible assets were not impaired as of May 27, 2017 on the basis that no adverse events or changes in circumstances\rwere identified that could indicate that the carrying amounts of such assets may not be recoverable.
\r\r\r\r
The\ramortization expense associated with the intangible assets subject to amortization for the next five years is presented in the\rfollowing table (in thousands):
\r\r\r\r
| \r | \r | \r | Amortization Expense | \r ||
| Fiscal\r Year | \r\r | \r | \r | \r | |
| 2018 | \r\r | \r | $ | \r432 | \r|
| 2019 | \r\r | \r | \r | 245 | \r|
| 2020 | \r\r | \r | \r | 257 | \r|
| 2021 | \r\r | \r | \r | 245 | \r|
| 2022 | \r\r | \r | \r | 252 | \r|
| Thereafter | \r\r | \r | \r | 2,010 | \r|
| Total\r amortization expense | \r\r | \r | $ | \r3,441 | \r
\r\r
The\ramortization expense associated with the intangible assets totaled approximately $0.4 million during fiscal 2017, $0.4 million\rduring fiscal 2016 and $0.1 million during fiscal 2015. The weighted average number of years of amortization expense remaining\ris 15.1 years.
"}]},{"name":"rpt:f-393","factDimensions":{"xbrl:concept":"us-gaap:CommitmentsAndContingenciesDisclosureTextBlock","xbrl:period":"2016-05-29T00:00:00/2017-05-28T00:00:00","xbrl:entity":"cik:0000355948"},"factValues":[{"value":"| 8. | \rLEASE OBLIGATIONS, OTHER COMMITMENTS, AND\r CONTINGENCIES |
\r\r
We\rlease certain warehouse and office facilities and office equipment under non-cancelable operating leases. Rent expense for fiscal\r2017, 2016, and 2015 was $1.9 million, $2.0 million, and $1.8 million, respectively. Our future lease commitments for minimum\rrentals, including common area maintenance charges and property taxes during the next five years are as follows (in thousands):
\r\r\r\r
| Fiscal\r Year | \r\r | Payments | \r||
| 2018 | \r\r | $ | \r1,607 | \r|
| 2019 | \r\r | \r | 1,407 | \r|
| 2020 | \r\r | \r | 1,108 | \r|
| 2021 | \r\r | \r | 805 | \r|
| 2022 | \r\r | \r | 161 | \r|
| Thereafter | \r\r | \r | 183 | \r
| 9. | \rINCOME TAXES |
\r\r
Loss\rfrom continuing operations before income taxes includes the following components (in thousands):
\r\r\r\r
| \r | \r | Fiscal\r Year Ended | \r||||||||||
| \r | \r | May\r 27, 2017 | \r \r | \r | May\r 28, 2016 | \r \r | \r | May\r 30, 2015 | \r ||||
| United\r States | \r\r | $ | \r(8,150 | \r) | \r\r | $ | \r(7,274 | \r) | \r\r | $ | \r(9,287 | \r) |
| Foreign | \r\r | \r | 2,034 | \r\r | \r | \r | 1,054 | \r\r | \r | \r | 2,293 | \r|
| Loss\r before income taxes | \r\r | $ | \r(6,116 | \r) | \r\r | $ | \r(6,220 | \r) | \r\r | $ | \r(6,994 | \r) |
\r\r
The\rprovision (benefit) for income taxes for fiscal 2017, 2016, and 2015 consists of the following (in thousands):
\r\r\r\r
| \r | \r | Fiscal\r Year Ended | \r||||||||||
| \r | \r | May\r 27, 2017 | \r \r | \r | May\r 28, 2016 | \r \r | \r | May\r 30, 2015 | \r ||||
| Current: | \r\r | \r | \r | \r | \r | \r | \r | \r | ||||
| Federal | \r\r | $ | \r(117 | \r) | \r\r | $ | \r— | \r\r | \r | $ | \r(326 | \r) |
| State | \r\r | \r | 3 | \r\r | \r | \r | 17 | \r\r | \r | \r | 14 | \r|
| Foreign | \r\r | \r | 1,035 | \r\r | \r | \r | 441 | \r\r | \r | \r | 191 | \r|
| Total\r current | \r\r | $ | \r921 | \r\r | \r | $ | \r458 | \r\r | \r | $ | \r(121 | \r) |
| Deferred: | \r\r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | |
| Federal | \r\r | $ | \r— | \r\r | \r | $ | \r— | \r\r | \r | $ | \r(1,964 | \r) |
| State | \r\r | \r | — | \r\r | \r | \r | — | \r\r | \r | \r | 530 | \r|
| Foreign | \r\r | \r | (109 | \r) | \r\r | \r | 88 | \r\r | \r | \r | 89 | \r|
| Total\r deferred | \r\r | $ | \r(109 | \r) | \r\r | $ | \r88 | \r\r | \r | $ | \r(1,345 | \r) |
| Income\r tax provision (benefit) | \r\r | $ | \r812 | \r\r | \r | $ | \r546 | \r\r | \r | $ | \r(1,466 | \r) |
\r\r
The\rdifferences between income taxes at the U.S. federal statutory income tax rate of 34% and the reported income tax provision (benefit)\rfor fiscal 2017, 2016, and 2015 are summarized as follows:
\r\r\r\r
| \r | \r | Fiscal\r Year Ended | \r||||||||||
| \r | \r | May\r 27, 2017 | \r \r | \r | May\r 28, 2016 | \r \r | \r | May\r 30, 2015 | \r ||||
| Federal\r statutory rate | \r\r | \r | 34 | \r% | \r\r | \r | 34 | \r% | \r\r | \r | 34 | \r% |
| Effect\r of: | \r\r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | |
| State\r income taxes, net of federal tax benefit | \r\r | \r | 4.8 | \r\r | \r | \r | 4.2 | \r\r | \r | \r | 5.3 | \r|
| Foreign\r income inclusion | \r\r | \r | (20.7 | \r) | \r\r | \r | (0.4 | \r) | \r\r | \r | (1.6 | \r) |
| Foreign\r taxes at other rates | \r\r | \r | 1.0 | \r\r | \r | \r | 0.6 | \r\r | \r | \r | 4.4 | \r|
| Permanent\r tax differences | \r\r | \r | (0.5 | \r) | \r\r | \r | (0.8 | \r) | \r\r | \r | (0.5 | \r) |
| Intercompany\r items | \r\r | \r | — | \r\r | \r | \r | — | \r\r | \r | \r | 2.2 | \r|
| Tax\r reserves | \r\r | \r | 0.9 | \r\r | \r | \r | (6.0 | \r) | \r\r | \r | 0.8 | \r|
| Additional\r U.S. tax on undistributed foreign earnings | \r\r | \r | 15.8 | \r\r | \r | \r | (32.7 | \r) | \r\r | \r | (0.5 | \r) |
| Net\r increase in valuation allowance for deferred tax assets | \r\r | \r | (46.6 | \r) | \r\r | \r | (11.4 | \r) | \r\r | \r | (27.3 | \r) |
| Return\r to provision adjustments | \r\r | \r | (2.0 | \r) | \r\r | \r | 3.9 | \r\r | \r | \r | 4.0 | \r|
| Other | \r\r | \r | — | \r\r | \r | \r | (0.2 | \r) | \r\r | \r | 0.1 | \r|
| Effective\r tax rate | \r\r | \r | (13.3 | \r)% | \r\r | \r | (8.8 | \r)% | \r\r | \r | 20.9 | \r% |
\r\r
Deferred\rincome taxes reflect the net tax effect of temporary differences between the carrying amounts of assets and liabilities for financial\rreporting purposes and the amounts used for income tax purposes. Our deferred tax assets and liabilities reflect continuing operations\ras of May 27, 2017 and May 28, 2016. Significant components are as follows (in thousands):
\r\r\r\r
| \r | \r | Fiscal\r Year Ended | \r||||||
| \r | \r | May\r 27, 2017 | \r \r | \r | May\r 28, 2016 | \r |||
| Deferred\r tax assets: | \r\r | \r | \r | \r | \r | \r | \r | |
| NOL\r carryforwards - foreign and domestic | \r\r | $ | \r7,870 | \r\r | \r | $ | \r9,089 | \r|
| Inventory\r valuations | \r\r | \r | 1,141 | \r\r | \r | \r | 1,141 | \r|
| Goodwill | \r\r | \r | 325 | \r\r | \r | \r | 798 | \r|
| Foreign\r tax credits | \r\r | \r | 3,808 | \r\r | \r | \r | 304 | \r|
| Severance\r reserve | \r\r | \r | 227 | \r\r | \r | \r | 34 | \r|
| Foreign\r capital loss | \r\r | \r | 1,142 | \r\r | \r | \r | 1,079 | \r|
| Other | \r\r | \r | 2,048 | \r\r | \r | \r | 2,167 | \r|
| Subtotal | \r\r | $ | \r16,561 | \r\r | \r | $ | \r14,612 | \r|
| Valuation\r allowance - foreign and domestic | \r\r | \r | (8,557 | \r) | \r\r | \r | (5,871 | \r) |
| Net\r deferred tax assets after valuation allowance | \r\r | $ | \r8,004 | \r\r | \r | $ | \r8,741 | \r|
| Deferred\r tax liabilities: | \r\r | \r | \r | \r | \r | \r | \r | |
| Accelerated\r depreciation | \r\r | $ | \r(1,356 | \r) | \r\r | $ | \r(973 | \r) |
| Tax\r on undistributed foreign earnings | \r\r | \r | (5,738 | \r) | \r\r | \r | (6,702 | \r) |
| Other | \r\r | \r | 35 | \r\r | \r | \r | (175 | \r) |
| Subtotal | \r\r | $ | \r(7,059 | \r) | \r\r | $ | \r(7,850 | \r) |
| Net\r deferred tax assets | \r\r | $ | \r945 | \r\r | \r | $ | \r891 | \r|
| Supplemental\r disclosure of deferred tax assets : | \r\r | \r | \r | \r | \r | \r | \r | |
| Domestic | \r\r | $ | \r6,937 | \r\r | \r | $ | \r4,190 | \r|
| Foreign | \r\r | $ | \r2,565 | \r\r | \r | $ | \r2,549 | \r|
| Total | \r\r | $ | \r9,502 | \r\r | \r | $ | \r6,739 | \r
\r\r
As\rof May 27, 2017, we had approximately $4.2 million of net deferred tax assets related to federal net operating loss (“NOL”)\rcarryforwards, compared to $5.7 million as of May 28, 2016. Net deferred tax assets related to domestic state NOL carryforwards\ramounted to approximately $3.0 million, compared to $2.7 million during fiscal 2016. Net deferred tax assets related to foreign\rNOL carryforwards totaled approximately $0.7 million with various or indefinite expiration dates. The amount of net deferred tax\rassets related to foreign NOL carryforwards was $0.6 million for fiscal 2016. We also have a domestic net deferred tax asset of\r$3.8 million of foreign tax credit carryforwards as of May 27, 2017, compared to $0.3 million as of May 28, 2016. The changes\rin balances from prior year for the federal NOL carryforwards was driven by current year taxable losses which was offset by income\rthat was generated from a dividend from Richardson Electronics China during the first quarter of fiscal 2017. The dividend also\rdrove the increase in the foreign tax credit carryforward. We do not have any alternative minimum tax credit carryforward as of\rMay 27, 2017.
\r\r\r\r
We\rhave historically determined that certain undistributed earnings of our foreign subsidiaries, to the extent of cash available,\rwill be repatriated to the U.S. Accordingly, we have provided a deferred tax liability totaling $5.7 million and $6.7 million\ras of May 27, 2017 and May 28, 2016, respectively, on foreign earnings of $39.5 million and $48.7 million, respectively. The decrease\ryear over year primarily relates to the realization of income from the Richardson Electronics China dividend which was previously\raccounted for at May 28, 2016 as part of our undistributed earnings liability for foreign subsidiaries. In addition, as of May\r27, 2017, $6.4 million of cumulative positive earnings of some of our foreign subsidiaries are still considered permanently reinvested\rpursuant to ASC 740-30, Income Taxes - Other Considerations or Special Areas (“ASC 740-30”). Due to various tax attributes\rthat are continuously changing, it is not practicable to determine what, if any, tax liability might exist if such earnings were\rto be repatriated.
\r\r\r\r
Management\rassesses the available positive and negative evidence to estimate if sufficient future taxable income will be generated to use\rthe existing deferred tax assets. A significant component of objective evidence evaluated was the cumulative income or loss incurred\rin each jurisdiction over the three-year period ended May 27, 2017. Such objective evidence limits the ability to consider subjective\revidence such as future income projections. We considered other positive evidence in determining the need for a valuation allowance\rin the U.S. including the repatriation of foreign earnings which we do not consider permanently reinvested in certain of our foreign\rsubsidiaries. The weight of this positive evidence is not sufficient to outweigh other negative evidence in evaluating our need\rfor a valuation allowance in the U.S. jurisdiction.
\r\r\r\r
As\rof May 27, 2017, a valuation allowance of $8.5 million has been established to record only the portion of the deferred tax asset\rthat will more likely than not be realized. There has been an increase in the valuation allowance from May 28, 2016 in the amount\rof $2.6 million. The valuation allowance relates to deferred tax assets in foreign jurisdictions where historical taxable losses\rhave been incurred. We also recorded a valuation allowance for all domestic federal and state net deferred tax assets considering\rthe significant cumulative losses in the U.S. jurisdiction, the reversal of the deferred tax liability for foreign earnings, and\rno forecast of additional U.S. income. The amount of the deferred tax asset considered realizable, however, could be adjusted\rif estimates of future taxable income during the carryforward period are increased, or if objective negative evidence in the form\rof cumulative losses is no longer present and additional weight may be given to subjective evidence such as our projections for\rgrowth.
\r\r\r\r
Income\rtaxes paid, including foreign estimated tax payments, were $0.4 million, $0.7 million, and $0.5 million, during fiscal 2017, 2016,\rand 2015, respectively.
\r\r\r\r
In\rthe normal course of business, we are subject to examination by taxing authorities throughout the world. Generally, years prior\rto fiscal 2007 are closed for examination under the statute of limitation for U.S. federal, U.S. state and local, or non-U.S.\rtax jurisdictions. We are under examination in the state of Illinois for fiscal years 2011 through 2013. We are currently under\rexamination in Germany (fiscal 2011 through 2014) and Thailand (fiscal 2008 through 2011). Our primary foreign tax jurisdictions\rare Germany and the Netherlands. We have tax years open in Germany beginning in fiscal 2011 and the Netherlands beginning in fiscal\r2011.
\r\r\r\r
The\runcertain tax positions from continuing operations as of May 27, 2017 and May 28, 2016, totaled $0.0 million and $0.1 million,\rrespectively. We record penalties and interest relating to uncertain tax positions in the income tax expense line item within\rthe unaudited consolidated statements of comprehensive loss. It is not expected that there will be a change in the unrecognized\rtax benefits within the next 12 months for which an amount can be determined.
\r\r\r\r
The\rfollowing table summarizes the activity related to the unrecognized tax benefits (in thousands):
\r\r\r\r
| \r | \r | Fiscal\r Year Ended | \r||||||
| \r | \r | May\r 27, 2017 | \r \r | \r | May\r 28, 2016 | \r |||
| Unrecognized\r tax benefits, beginning of period | \r\r | $ | \r2,000 | \r\r | \r | $ | \r2,000 | \r|
| Increase\r in positions taken in prior period | \r\r | \r | 75 | \r\r | \r | \r | 299 | \r|
| Decrease\r in positions due to settlements | \r\r | \r | (75 | \r) | \r\r | \r | — | \r|
| Decrease\r related to the expiration of statute of limitations | \r\r | \r | (117 | \r) | \r\r | \r | (299 | \r) |
| Unrecognized\r tax benefits, end of period | \r\r | $ | \r1,883 | \r\r | \r | $ | \r2,000 | \r
\r\r
Unrecognized\rtax benefits for continuing and discontinued operations are as follows (in thousands):
\r\r\r\r
| \r | \r | Fiscal\r Year Ended | \r||||||
| \r | \r | May\r 27, 2017 | \r \r | \r | May\r 28, 2016 | \r |||
| Continuing\r operations | \r\r | $ | \r— | \r\r | \r | $ | \r117 | \r|
| Discontinued\r operations (1) | \r\r | \r | 1,883 | \r\r | \r | \r | 1,883 | \r|
| \r | \r | $ | \r1,883 | \r\r | \r | $ | \r2,000 | \r
\r\r
| (1) | \rRelates to an amended Illinois state income\r tax return related to the sale of RFPD. |
| \r | 10. | \rEMPLOYEE BENEFIT PLANS |
\r\r
Employee\rProfit Sharing Plan: The employee profit sharing plan is a defined contribution profit sharing plan for employees. The profit\rsharing plan has a 401(k) provision whereby we match 50% of employee contributions up to 4.0% of pay. The Company suspended the\rmatch component for fiscal 2017. Charges to expense for matching contributions to this plan were $0.0 million, $0.4 million, and\r$0.3 million, during fiscal 2017, 2016, and 2015, respectively.
"}]},{"name":"rpt:f-396","factDimensions":{"xbrl:concept":"us-gaap:SegmentReportingDisclosureTextBlock","xbrl:period":"2016-05-29T00:00:00/2017-05-28T00:00:00","xbrl:entity":"cik:0000355948"},"factValues":[{"value":"| 11. | \rSEGMENT AND GEOGRAPHIC INFORMATION |
\r\r
During\rthe first quarter of fiscal 2015, we created a new strategic business unit called Healthcare. As hospitals remain under pressure\rto reduce costs while serving a much larger customer base, there is a growing demand for independent sources of high value replacement\rparts for diagnostic imaging. Having access to parts that are tested and in stock enables hospitals to terminate expensive service\rcontracts with OEM and instead use third party service providers or in-house technicians. With our global infrastructure, technical\rsales team, and experience servicing the healthcare market, we are well positioned to take advantage of this market opportunity.\rOver time, our plan is to expand our position from being the leader in power grid tubes to a key player in the high-growth, high-profile\rHealthcare industry.
\r\r\r\r
In\raccordance with ASC 280-10, Segment Reporting, we have identified three reportable segments: PMT and Canvys, and Healthcare.
\r\r\r\r
The\rPower and Microwave Technologies Group (“PMT”), formerly called the Electron Device Group\r(“EDG”), prior to July 2015, provides engineered solutions and distributes electronic components to customers in\ralternative energy, aviation, broadcast, communications, industrial, marine, medical, military, scientific, and semiconductor\rmarkets. PMT focuses on various applications including broadcast transmission, CO2 laser cutting, diagnostic imaging,\rdielectric and induction heating, high energy transfer, high voltage switching, plasma, power conversion, radar, and\rradiation oncology. PMT also offers its customers technical services for both microwave and industrial equipment.
\r\r\r\r
Canvys\rprovides customized display solutions serving the corporate enterprise, financial, healthcare, industrial, and medical OEM markets.
\r\r\r\r\r\r\r
Healthcare\rmanufactures, refurbishes and distributes high value replacement parts for the healthcare market including hospitals, medical\rcenters, asset management companies, independent service organizations, and multi-vendor service providers. Products include Diagnostic\rImaging replacement parts including CT and MRI tubes, hydrogen thyratrons, klystrons, magnetrons; replacement flat panel detectors\rand upgrades; and additional replacement components currently under development for the diagnostic imaging service market. Through\ra combination of newly developed products and partnerships, service offerings, and training programs, we believe we can help our\rcustomers improve efficiency and deliver better clinical outcomes while lowering the cost of healthcare delivery.
\r\r\r\r
The\rCEO evaluates performance and allocates resources primarily based on the gross profit of each segment.
\r\r\r\r
Operating\rresults by segment are summarized in the following table (in thousands):
\r\r\r\r
| \r | \r | Fiscal\r Year Ended | \r||||||||||
| \r | \r | May\r 27, 2017 | \r \r | \r | May\r 28, 2016 | \r \r | \r | May\r 30, 2015 | \r ||||
| PMT | \r\r | \r | \r | \r | \r | \r | \r | \r | ||||
| Net Sales | \r\r | $ | \r104,226 | \r\r | \r | $ | \r105,554 | \r\r | \r | $ | \r105,748 | \r|
| Gross Profit | \r\r | \r | 33,382 | \r\r | \r | \r | 33,088 | \r\r | \r | \r | 33,098 | \r|
| Canvys | \r\r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | |
| Net Sales | \r\r | $ | \r20,534 | \r\r | \r | $ | \r23,453 | \r\r | \r | $ | \r24,645 | \r|
| Gross Profit | \r\r | \r | 5,752 | \r\r | \r | \r | 6,017 | \r\r | \r | \r | 6,457 | \r|
| Healthcare | \r\r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | |
| Net Sales | \r\r | $ | \r12,112 | \r\r | \r | $ | \r13,009 | \r\r | \r | $ | \r6,564 | \r|
| Gross Profit | \r\r | \r | 4,749 | \r\r | \r | \r | 5,730 | \r\r | \r | \r | 1,583 | \r
\r\r
A\rreconciliation of assets to the relevant consolidated amount is as follows (in thousands):
\r\r\r\r
| \r | \r | May\r 27, 2017 | \r \r | \r | May\r 28, 2016 | \r |||
| Segment\r assets | \r\r | $ | \r80,105 | \r\r | \r | $ | \r84,863 | \r|
| Cash\r and cash equivalents | \r\r | \r | 55,327 | \r\r | \r | \r | 60,454 | \r|
| Investments\r - current | \r\r | \r | 6,429 | \r\r | \r | \r | 2,268 | \r|
| Other\r current assets (1) | \r\r | \r | 3,330 | \r\r | \r | \r | 3,143 | \r|
| Net\r property, plant and equipment | \r\r | \r | 8,752 | \r\r | \r | \r | 8,333 | \r|
| Investments\r - non-current | \r\r | \r | 2,419 | \r\r | \r | \r | 7,799 | \r|
| Other\r assets - non-current deferred income taxes | \r\r | \r | 1,102 | \r\r | \r | \r | 1,270 | \r|
| Total\r assets | \r\r | $ | \r157,464 | \r\r | \r | $ | \r168,130 | \r
\r\r
| (1) | \rOther current\r assets include miscellaneous receivables, prepaid expenses, and current deferred income taxes. |
\r\r
Assets\rare not disclosed by reportable segment as the Company does not track assets by reportable segment and certain assets are not\rspecific to any reportable segment.
\r\r\r\r
Capital\rexpenditures for our Healthcare segment during fiscal 2017 and 2016 were approximately $3.4 million and $2.9 million, respectively.\rIn addition, we also had capital expenditures during fiscal 2017 and fiscal 2016 related to the Company’s new ERP system\rthat are not specific to any particular reportable segment.
\r\r\r\r
Geographic\rnet sales information is primarily grouped by customer destination into five areas: North America; Asia/Pacific; Europe; Latin\rAmerica; and Other.
\r\r\r\r
Net\rsales and gross profit by geographic region are summarized in the following table (in thousands):
\r\r\r\r
| \r | \r | Fiscal\r Year Ended | \r||||||||||
| \r | \r | May\r 27, 2017 | \r \r | \r | May\r 28, 2016 | \r \r | \r | May\r 30, 2015 | \r ||||
| Net\r Sales | \r\r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | |
| North America | \r\r | $ | \r55,963 | \r\r | \r | $ | \r66,365 | \r\r | \r | $ | \r59,742 | \r|
| Asia/Pacific | \r\r | \r | 27,997 | \r\r | \r | \r | 24,564 | \r\r | \r | \r | 24,605 | \r|
| Europe | \r\r | \r | 44,296 | \r\r | \r | \r | 44,634 | \r\r | \r | \r | 44,425 | \r|
| Latin America | \r\r | \r | 8,552 | \r\r | \r | \r | 6,347 | \r\r | \r | \r | 8,275 | \r|
| Other (1) | \r\r | \r | 64 | \r\r | \r | \r | 106 | \r\r | \r | \r | (90 | \r) |
| Total | \r\r | $ | \r136,872 | \r\r | \r | $ | \r142,016 | \r\r | \r | $ | \r136,957 | \r|
| Gross\r Profit | \r\r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | |
| North America | \r\r | $ | \r20,597 | \r\r | \r | $ | \r23,506 | \r\r | \r | $ | \r20,352 | \r|
| Asia/Pacific | \r\r | \r | 9,630 | \r\r | \r | \r | 8,212 | \r\r | \r | \r | 7,967 | \r|
| Europe | \r\r | \r | 14,418 | \r\r | \r | \r | 13,541 | \r\r | \r | \r | 14,051 | \r|
| Latin America | \r\r | \r | 3,250 | \r\r | \r | \r | 2,397 | \r\r | \r | \r | 3,082 | \r|
| Other (1) | \r\r | \r | (4,012 | \r) | \r\r | \r | (2,821 | \r) | \r\r | \r | (4,314 | \r) |
| Total | \r\r | $ | \r43,883 | \r\r | \r | $ | \r44,835 | \r\r | \r | $ | \r41,138 | \r
\r\r
| \r | (1) | \rOther primarily includes net sales not allocated\r to a specific geographical region, unabsorbed value-add costs, and other unallocated expenses. |
\r\r
We\rsell our products to customers in diversified industries and perform periodic credit evaluations of our customers’ financial\rcondition. Terms are generally on open account, payable net 30 days in North America, and vary throughout Asia/Pacific, Europe,\rand Latin America. Estimates of credit losses are recorded in the financial statements based on monthly reviews of outstanding\raccounts.
\r\r\r\r
Net\rassets by geographic region are summarized in the following table (in thousands):
\r\r\r\r
| \r | \r | Fiscal\r Year Ended | \r||||||||||
| \r | \r | May\r 27, 2017 | \r \r | \r | May\r 28, 2016 | \r \r | \r | May\r 30, 2015 | \r ||||
| Net\r Assets | \r\r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | |
| North America | \r\r | $ | \r62,085 | \r\r | \r | $ | \r65,832 | \r\r | \r | $ | \r76,153 | \r|
| Asia/Pacific | \r\r | \r | 34,990 | \r\r | \r | \r | 42,547 | \r\r | \r | \r | 44,602 | \r|
| Europe | \r\r | \r | 32,794 | \r\r | \r | \r | 31,495 | \r\r | \r | \r | 34,127 | \r|
| Latin\r America | \r\r | \r | 2,458 | \r\r | \r | \r | 1,801 | \r\r | \r | \r | 1,770 | \r|
| Total | \r\r | $ | \r132,327 | \r\r | \r | $ | \r141,675 | \r\r | \r | $ | \r156,652 | \r
\r\r
The\rCompany has long-lived assets of $19.3 million as of May 27, 2017 and $16.8 million as of May 28, 2016. The long-lived assets,\rwhich include our fixed assets and intangibles, are primarily in the US. There are approximately $1.2 million of long-lived assets\rthat belong to our foreign affiliates as of May 27, 2017 and $1.3 million as of May 28, 2016.
\r\r\r\r
The\rCompany had depreciation and amortization expense of $2.7 million, $2.4 million and $1.7 million for fiscal 2017, fiscal 2016\rand fiscal 2015, respectively. The depreciation and amortization, which includes our fixed assets and intangibles, are primarily\rin the US. Depreciation and amortization expense that belong to our foreign affiliates was approximately $0.3 million for fiscal\r2017, fiscal 2016 and fiscal 2015.
"}]},{"name":"rpt:f-397","factDimensions":{"xbrl:concept":"us-gaap:LegalMattersAndContingenciesTextBlock","xbrl:period":"2016-05-29T00:00:00/2017-05-28T00:00:00","xbrl:entity":"cik:0000355948"},"factValues":[{"value":"| 12. | \rLITIGATION |
\r\r
We\rare involved in several pending judicial proceedings concerning matters arising in the ordinary course of business. While the\routcome of litigation is subject to uncertainties, based on information available at the time the financial statements were issued,\rwe determined disclosure of contingencies relating to any of our pending judicial proceedings was not necessary because there\rwas less than a reasonable possibility that a material loss had been incurred.
"}]},{"name":"rpt:f-398","factDimensions":{"xbrl:concept":"us-gaap:FairValueDisclosuresTextBlock","xbrl:period":"2016-05-29T00:00:00/2017-05-28T00:00:00","xbrl:entity":"cik:0000355948"},"factValues":[{"value":"| 13. | \rFAIR VALUE MEASUREMENTS |
\r\r
ASC\r820, Fair Value Measurements and Disclosures (“ASC 820”), defines fair value, establishes a framework for measuring\rfair value in accordance with accounting principles generally accepted in the United States, and expands disclosures about fair\rvalue measurements.
\r\r\r\r
ASC\r820 establishes a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value. These tiers\rinclude: Level 1, defined as observable inputs such as quoted prices in active markets; Level 2, defined as inputs other than\rquoted prices in active markets that are either directly or indirectly observable; and Level 3, defined as unobservable inputs\rin which little or no market data exists; therefore requiring an entity to develop its own assumptions.
\r\r\r\r
As\rof May 27, 2017, we held investments that are required to be measured at fair value on a recurring basis. Our investments\rconsist of time deposits and CDs, where face value is equal to fair value, and equity securities of publicly traded companies\rfor which market prices are readily available.
\r\r\r\r
Investments\rmeasured at fair value on a recurring basis subject to the disclosure requirements of ASC 820 as of May 27, 2017 and May 28,\r2016, were as follows (in thousands):
\r\r\r\r
| \r | \r | Level 1 | \r\r | \r | Level 2 | \r\r | \r | Level 3 | \r||||
| May 27, 2017 | \r\r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | |
| Time deposits/CDs | \r\r | $ | \r8,226 | \r\r | \r | $ | \r— | \r\r | \r | $ | \r— | \r|
| Equity\r securities | \r\r | \r | 622 | \r\r | \r | \r | — | \r\r | \r | \r | — | \r|
| Total | \r\r | $ | \r8,848 | \r\r | \r | $ | \r— | \r\r | \r | $ | \r— | \r|
| May 28, 2016 | \r\r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | |
| Time deposits/CDs | \r\r | $ | \r9,517 | \r\r | \r | $ | \r— | \r\r | \r | $ | \r— | \r|
| Equity\r securities | \r\r | \r | 550 | \r\r | \r | \r | — | \r\r | \r | \r | — | \r|
| Total | \r\r | $ | \r10,067 | \r\r | \r | $ | \r— | \r\r | \r | $ | \r— | \r
| 14. | \rVALUATION AND QUALIFYING ACCOUNTS |
\r\r
The\rfollowing table presents the valuation and qualifying account activity for fiscal year ended May 27, 2017, May 28, 2016,\rand May 30, 2015, (in thousands):
\r\r\r\r
| Description | \r\r | Balance at beginning\r of period | \r \r | Charged to expense | \r \r | Deductions | \r\r | Balance at end\r of period | ||||||||||
| Year\r ended May 27, 2017 | \r\r | \r | \r | \r | \r | \r | \r | |||||||||||
| Allowance\r for doubtful accounts | \r\r | $ | \r364 | \r\r | \r | $ | \r226 | \r\r | (1) | \r\r | $ | \r(192 | \r) | \r(2) | \r\r | $ | \r398 | \r|
| Inventory\r provisions | \r\r | \r | 3,380 | \r\r | \r | \r | 456 | \r\r | (3) | \r\r | \r | 380 | \r\r | (4) | \r\r | \r | 3,456 | \r|
| Year\r ended May 28, 2016 | \r\r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | |
| Allowance\r for doubtful accounts | \r\r | $ | \r283 | \r\r | \r | $ | \r228 | \r\r | (1) | \r\r | $ | \r(147 | \r) | \r(2) | \r\r | $ | \r364 | \r|
| Inventory\r provisions | \r\r | \r | 2,991 | \r\r | \r | \r | 690 | \r\r | (3) | \r\r | \r | 301 | \r\r | (4) | \r\r | \r | 3,380 | \r|
| Year\r ended May 30, 2015 | \r\r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | |
| Allowance\r for doubtful accounts | \r\r | $ | \r581 | \r\r | \r | $ | \r(221 | \r) | \r(1) | \r\r | $ | \r77 | \r\r | (2) | \r\r | $ | \r283 | \r|
| Inventory\r provisions | \r\r | \r | 3,141 | \r\r | \r | \r | 228 | \r\r | (3) | \r\r | \r | 378 | \r\r | (4) | \r\r | \r | 2,991 | \r
\r\r
Notes:
\r\r\r\r
| (1) | \rCharges to bad debt expense, net of bad debt\r recoveries. |
| (2) | \rUncollectible amounts written off, net of\r recoveries and foreign currency translation. |
| (3) | \rCharges to cost of sales. Included in fiscal\r 2017 are inventory write-downs of $0.4 million for PMT and $0.1 million for Canvys, and less than $0.1 million for Healthcare. |
| (4) | \rInventory disposed of or sold, net of foreign\r currency translation. |
| 15. | \rSELECTED QUARTERLY FINANCIAL DATA (UNAUDITED) |
\r\r
| Description | \r\r | First Quarter | \r \r | \r | Second Quarter | \r \r | \r | Third Quarter | \r \r | \r | Fourth Quarter | \r |||||
| Fiscal\r 2017 | \r\r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | |
| Net\r sales | \r\r | $ | \r33,373 | \r\r | \r | $ | \r33,827 | \r\r | \r | $ | \r32,313 | \r\r | \r | $ | \r37,359 | \r|
| Gross\r profit | \r\r | \r | 10,240 | \r\r | \r | \r | 10,964 | \r\r | \r | \r | 10,692 | \r\r | \r | \r | 11,987 | \r|
| Loss\r from continuing operations | \r\r | \r | (2,850 | \r) | \r\r | \r | (2,522 | \r) | \r\r | \r | (1,431 | \r) | \r\r | \r | (125 | \r) |
| Net\r loss | \r\r | \r | (2,850 | \r) | \r\r | \r | (2,522 | \r) | \r\r | \r | (1,431 | \r) | \r\r | \r | (125 | \r) |
| Loss\r from continuing operations | \r\r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | |
| Common\r stock - basic | \r\r | $ | \r(0.23 | \r) | \r\r | $ | \r(0.20 | \r) | \r\r | $ | \r(0.11 | \r) | \r\r | $ | \r(0.01 | \r) |
| Class\r B common stock - basic | \r\r | $ | \r(0.20 | \r) | \r\r | $ | \r(0.18 | \r) | \r\r | $ | \r(0.10 | \r) | \r\r | $ | \r(0.01 | \r) |
| Common\r stock - diluted | \r\r | $ | \r(0.23 | \r) | \r\r | $ | \r(0.20 | \r) | \r\r | $ | \r(0.11 | \r) | \r\r | $ | \r(0.01 | \r) |
| Class\r B common stock - diluted | \r\r | $ | \r(0.20 | \r) | \r\r | $ | \r(0.18 | \r) | \r\r | $ | \r(0.10 | \r) | \r\r | $ | \r(0.01 | \r) |
| Net\r loss | \r\r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | |
| Common\r stock - basic | \r\r | $ | \r(0.23 | \r) | \r\r | $ | \r(0.20 | \r) | \r\r | $ | \r(0.11 | \r) | \r\r | $ | \r(0.01 | \r) |
| Class\r B common stock - basic | \r\r | $ | \r(0.20 | \r) | \r\r | $ | \r(0.18 | \r) | \r\r | $ | \r(0.10 | \r) | \r\r | $ | \r(0.01 | \r) |
| Common\r stock - diluted | \r\r | $ | \r(0.23 | \r) | \r\r | $ | \r(0.20 | \r) | \r\r | $ | \r(0.11 | \r) | \r\r | $ | \r(0.01 | \r) |
| Class\r B common stock - diluted | \r\r | $ | \r(0.20 | \r) | \r\r | $ | \r(0.18 | \r) | \r\r | $ | \r(0.10 | \r) | \r\r | $ | \r(0.01 | \r) |
| Fiscal\r 2016 | \r\r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | |
| Net\r sales | \r\r | $ | \r37,071 | \r\r | \r | $ | \r34,086 | \r\r | \r | $ | \r31,291 | \r\r | \r | $ | \r39,568 | \r|
| Gross\r profit | \r\r | \r | 11,262 | \r\r | \r | \r | 10,435 | \r\r | \r | \r | 9,750 | \r\r | \r | \r | 13,388 | \r|
| Loss\r from continuing operations | \r\r | \r | (1,399 | \r) | \r\r | \r | (2,286 | \r) | \r\r | \r | (2,926 | \r) | \r\r | \r | (155 | \r) |
| Net\r loss | \r\r | \r | (1,399 | \r) | \r\r | \r | (2,286 | \r) | \r\r | \r | (2,926 | \r) | \r\r | \r | (155 | \r) |
| Loss\r from continuing operations | \r\r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | |
| Common\r stock - basic | \r\r | $ | \r(0.10 | \r) | \r\r | $ | \r(0.18 | \r) | \r\r | $ | \r(0.23 | \r) | \r\r | $ | \r(0.01 | \r) |
| Class\r B common stock - basic | \r\r | $ | \r(0.10 | \r) | \r\r | $ | \r(0.16 | \r) | \r\r | $ | \r(0.21 | \r) | \r\r | $ | \r(0.01 | \r) |
| Common\r stock - diluted | \r\r | $ | \r(0.10 | \r) | \r\r | $ | \r(0.18 | \r) | \r\r | $ | \r(0.23 | \r) | \r\r | $ | \r(0.01 | \r) |
| Class\r B common stock - diluted | \r\r | $ | \r(0.10 | \r) | \r\r | $ | \r(0.16 | \r) | \r\r | $ | \r(0.21 | \r) | \r\r | $ | \r(0.01 | \r) |
| Net\r loss | \r\r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | |
| Common\r stock - basic | \r\r | $ | \r(0.10 | \r) | \r\r | $ | \r(0.18 | \r) | \r\r | $ | \r(0.23 | \r) | \r\r | $ | \r(0.01 | \r) |
| Class\r B common stock - basic | \r\r | $ | \r(0.10 | \r) | \r\r | $ | \r(0.16 | \r) | \r\r | $ | \r(0.21 | \r) | \r\r | $ | \r(0.01 | \r) |
| Common\r stock - diluted | \r\r | $ | \r(0.10 | \r) | \r\r | $ | \r(0.18 | \r) | \r\r | $ | \r(0.23 | \r) | \r\r | $ | \r(0.01 | \r) |
| Class\r B common stock - diluted | \r\r | $ | \r(0.10 | \r) | \r\r | $ | \r(0.16 | \r) | \r\r | $ | \r(0.21 | \r) | \r\r | $ | \r(0.01 | \r) |
Use\rof Estimates: The preparation of financial statements in conformity with GAAP requires management to make significant estimates\rand assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities\rat the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Management\rcontinuously evaluates its critical accounting policies and estimates, including the allowance for doubtful accounts, revenue\rrecognition, inventory obsolescence, goodwill and other intangible assets, loss contingencies, and income taxes. Management bases\rthe estimates on historical experience and on various other assumptions believed to be reasonable under the circumstances, however,\ractual results could differ from those estimates.
"}]},{"name":"rpt:f-402","factDimensions":{"xbrl:concept":"us-gaap:FairValueOfFinancialInstrumentsPolicy","xbrl:period":"2016-05-29T00:00:00/2017-05-28T00:00:00","xbrl:entity":"cik:0000355948"},"factValues":[{"value":"Fair\rValues of Financial Instruments: The fair values of financial instruments are determined based on quoted market prices and\rmarket interest rates as of the end of the reporting period. Our financial instruments include investments, accounts receivable,\raccounts payable, and accrued liabilities. The fair values of these financial instruments approximate carrying values at\rMay 27, 2017, and May 28, 2016.
"}]},{"name":"rpt:f-403","factDimensions":{"xbrl:concept":"us-gaap:CashAndCashEquivalentsPolicyTextBlock","xbrl:period":"2016-05-29T00:00:00/2017-05-28T00:00:00","xbrl:entity":"cik:0000355948"},"factValues":[{"value":"Cash\rand Cash Equivalents: We consider short-term, highly liquid investments that are readily convertible to known amounts\rof cash, and so near their maturity that they present insignificant risk of changes in value because of changes in interest rates,\rand that have a maturity of three months or less, when purchased, to be cash equivalents. The carrying amounts reported in the\rbalance sheet for cash and cash equivalents approximate the fair market value of these assets.
"}]},{"name":"rpt:f-404","factDimensions":{"xbrl:concept":"us-gaap:ReceivablesTradeAndOtherAccountsReceivableAllowanceForDoubtfulAccountsPolicy","xbrl:period":"2016-05-29T00:00:00/2017-05-28T00:00:00","xbrl:entity":"cik:0000355948"},"factValues":[{"value":"Allowance\rfor Doubtful Accounts: Our allowance for doubtful accounts includes estimated losses that result from uncollectible receivables.\rThe estimates are influenced by the following: continuing credit evaluation of customers’ financial conditions; aging of\rreceivables, individually and in the aggregate; a large number of customers which are widely dispersed across geographic areas;\rcollectability and delinquency history by geographic area; and the fact that no single customer accounts for more than 10% of\rnet sales. Significant changes in one or more of these considerations may require adjustments affecting net income and net carrying\rvalue of accounts receivable. The allowance for doubtful accounts was approximately $0.4 million as of both May 27, 2017, and\ras of May 28, 2016.
"}]},{"name":"rpt:f-405","factDimensions":{"xbrl:concept":"us-gaap:CommitmentsAndContingenciesPolicyTextBlock","xbrl:period":"2016-05-29T00:00:00/2017-05-28T00:00:00","xbrl:entity":"cik:0000355948"},"factValues":[{"value":"Loss\rContingencies: We accrue a liability for loss contingencies when it is probable that a liability has been incurred and the\ramount can be reasonably estimated. When only a range of possible loss can be established, the most probable amount in the range\ris accrued. If no amount within this range is a better estimate than any other amount within the range, the minimum amount in\rthe range is accrued. If we determine that there is at least a reasonable possibility that a loss may have been incurred, we will\rinclude a disclosure describing the contingency.
"}]},{"name":"rpt:f-406","factDimensions":{"xbrl:concept":"us-gaap:RevenueRecognitionPolicyTextBlock","xbrl:period":"2016-05-29T00:00:00/2017-05-28T00:00:00","xbrl:entity":"cik:0000355948"},"factValues":[{"value":"Revenue\rRecognition: Our product sales are recognized as revenue upon shipment, when title passes to the customer, when delivery\rhas occurred or services have been rendered, and when collectability is reasonably assured. We also record estimated discounts\rand returns based on our historical experience. Our products are often manufactured to meet the specific design needs of our customers’\rapplications. Our engineers work closely with customers to ensure that our products will meet their needs. Our customers are under\rno obligation to compensate us for designing the products we sell.
"}]},{"name":"rpt:f-407","factDimensions":{"xbrl:concept":"us-gaap:ForeignCurrencyTransactionsAndTranslationsPolicyTextBlock","xbrl:period":"2016-05-29T00:00:00/2017-05-28T00:00:00","xbrl:entity":"cik:0000355948"},"factValues":[{"value":"Foreign\rCurrency Translation: The functional currency is the local currency at all foreign locations, with the exception of Hong\rKong, which the functional currency is the US dollar. Balance sheet items for our foreign entities, included in our consolidated\rbalance sheet are translated into U.S. dollars at end-of-period spot rates. Gains and losses resulting from translation of foreign\rsubsidiary financial statements are credited or charged directly to accumulated other comprehensive income/(loss), a component\rof stockholders’ equity. Revenues and expenses are translated at the current rate on the date of the transaction. Gains\rand losses resulting from foreign currency transactions are included in income. Foreign currency translation reflected in our\rconsolidated statements of comprehensive loss was a loss of $0.6 million during fiscal 2017, a loss of $0.2 million during fiscal\r2016, and a gain of $0.2 million during fiscal 2015.
"}]},{"name":"rpt:f-408","factDimensions":{"xbrl:concept":"us-gaap:ShippingAndHandlingCostPolicyTextBlock","xbrl:period":"2016-05-29T00:00:00/2017-05-28T00:00:00","xbrl:entity":"cik:0000355948"},"factValues":[{"value":"Shipping\rand Handling Fees and Costs: Shipping and handling costs billed to customers are reported as revenue and the related\rcosts are reported as a component of cost of sales.
"}]},{"name":"rpt:f-409","factDimensions":{"xbrl:concept":"us-gaap:IncomeTaxPolicyTextBlock","xbrl:period":"2016-05-29T00:00:00/2017-05-28T00:00:00","xbrl:entity":"cik:0000355948"},"factValues":[{"value":"Income\rTaxes: We recognize deferred tax assets and liabilities based on the differences between financial statement carrying\ramounts and the tax bases of assets and liabilities. We regularly review our deferred tax assets for recoverability and determine\rthe need for a valuation allowance based on a number of factors, including both positive and negative evidence. These factors\rinclude historical taxable income or loss, projected future taxable income or loss, the expected timing of the reversals of existing\rtemporary differences, and the implementation of tax planning strategies. In circumstances where we, or any of our affiliates,\rhave incurred three years of cumulative losses which constitute significant negative evidence, positive evidence of equal or greater\rsignificance is needed to overcome the negative evidence before a tax benefit is recognized for deductible temporary differences\rand loss carryforwards.
"}]},{"name":"rpt:f-410","factDimensions":{"xbrl:concept":"us-gaap:InvestmentPolicyTextBlock","xbrl:period":"2016-05-29T00:00:00/2017-05-28T00:00:00","xbrl:entity":"cik:0000355948"},"factValues":[{"value":"Investments:\rAs of May 27, 2017, we have invested in time deposits and certificates of deposit (“CD”) in the amount of $8.2\rmillion. Of this, $6.4 million mature in less than twelve months and $1.8 million mature in greater than twelve months. As of\rMay 28, 2016, we had approximately $9.5 million invested in time deposits and CD’s. Of this, $2.3 million mature in\rless than twelve months and $7.2 million mature in greater than twelve months. The fair value of these investments is the face\rvalue of each time deposit and CD.
\r\r\r\r
We\ralso have investments in equity securities, all of which are classified as available-for-sale and are carried at their fair value\rbased on quoted market prices. Our investments, which are included in non-current assets, had a carrying amount of $0.6 million\rat May 27, 2017 and at May 28, 2016. Proceeds from the sale of securities were $0.3 million during fiscal 2017, $0.3 million\rduring fiscal 2016 and $0.2 million during fiscal 2015. We reinvested proceeds from the sale of securities, and the cost of the\requity securities sold was based on a specific identification method. Gross realized gains and losses on those sales were less\rthan $0.1 million during fiscal 2017, 2016, and 2015. Net unrealized holding losses during fiscal 2017, 2016, and 2015, were less\rthan $0.1 million and have been included in accumulated comprehensive loss during its respective fiscal year.
"}]},{"name":"rpt:f-411","factDimensions":{"xbrl:concept":"us-gaap:DiscontinuedOperationsPolicyTextBlock","xbrl:period":"2016-05-29T00:00:00/2017-05-28T00:00:00","xbrl:entity":"cik:0000355948"},"factValues":[{"value":"Discontinued\rOperations: During fiscal 2011, we completed the sale of the assets primarily used or held for use in, and certain liabilities\rof our RF, Wireless, and Power Division (“RFPD”), as well as certain other Company assets, including our information\rtechnology assets, to Arrow Electronics, Inc. (“Arrow”) in exchange for $238.8 million, (“the Transaction”).\rIn accordance with Accounting Standards Codification (“ASC”) 205-20, Presentation of Financial Statements - Discontinued\rOperations (“ASC 205-20”), we reported the financial results of RFPD as a discontinued operation.
\r\r\r\r
During\rfiscal 2017, the Company disposed of, by sale, the PACS Display business. Based on our assessment of the criteria that must be\rmet to qualify a disposal transaction as a discontinued operation set forth in Accounting Standards Update 2014-08, the disposal\rof the PACS Display business does not qualify as a discontinued operation.
"}]},{"name":"rpt:f-412","factDimensions":{"xbrl:concept":"us-gaap:GoodwillAndIntangibleAssetsPolicyTextBlock","xbrl:period":"2016-05-29T00:00:00/2017-05-28T00:00:00","xbrl:entity":"cik:0000355948"},"factValues":[{"value":"Goodwill\rand Other Intangible Assets: We test goodwill for impairment annually and whenever events or circumstances indicate an impairment\rmay have occurred, such as a significant adverse change in the business climate, loss of key personnel or a decision to sell or\rdispose of a reporting unit.
\r\r\r\r
During\rthe fourth quarter of each fiscal year, our goodwill balances are reviewed for impairment using the first day of our fourth quarter\ras the measurement date. If after reviewing the totality of events or circumstances as provided in ASU 2011-08 we determine that\rit is not likely that the fair value of a reporting unit exceeds its carrying amount, then we test for impairment through the\rapplication of a fair value based test. We estimate the fair value of each of our reporting units based on projected future operating\rresults, market approach, and discounted cash flows.
\r\r\r\r
Our\rgoodwill impairment testing follows the two-step process as defined in ASC 350. The first step in the process compares the fair\rvalue of the reporting unit to its carrying value. If the carrying value of the reporting unit exceeds its fair value, the second\rstep of the impairment test is performed to measure the amount of impairment loss to be recognized. In the second step, the fair\rvalue of the reporting unit resulting from the first step of the evaluation is allocated to the fair value of all of the assets\rand liabilities of the reporting unit in order to determine an implied goodwill value. This allocation is similar to the purchase\rprice allocation performed in purchase accounting. If the carrying amount of the goodwill reported exceeds the implied goodwill\rvalue, an impairment loss should be recognized in an amount equal to that excess.
\r\r\r\r
Intangible\rassets are initially recorded at their fair market values determined on quoted market prices in active markets, if available,\ror recognized valuation models. Intangible assets that have finite useful lives are amortized on a straight-line basis over their\ruseful lives. Our intangible assets represent the fair value for trade name, customer relationships, non-compete agreements, and\rtechnology acquired in connection with the acquisitions.
"}]},{"name":"rpt:f-413","factDimensions":{"xbrl:concept":"us-gaap:PropertyPlantAndEquipmentPolicyTextBlock","xbrl:period":"2016-05-29T00:00:00/2017-05-28T00:00:00","xbrl:entity":"cik:0000355948"},"factValues":[{"value":"Property,\rPlant and Equipment: Property, plant and equipment are stated at cost, net of accumulated depreciation. Improvements\rand replacements are capitalized while expenditures for maintenance and repairs are charged to expense as incurred. Provisions\rfor depreciation are computed using the straight-line method over the estimated useful life of the asset. Depreciation expense\rwas approximately $2.4 million, $2.0 million, and $1.7 million during fiscal 2017, 2016, and 2015, respectively. Property, plant\rand equipment consist of the following (in thousands):
\r\r\r\r
| \r | \r | May\r 27, 2017 | \r \r | \r | May\r 28, 2016 | \r |||
| Land\r and improvements | \r\r | $ | \r1,301 | \r\r | \r | $ | \r1,301 | \r|
| Buildings\r and improvements | \r\r | \r | 19,885 | \r\r | \r | \r | 19,023 | \r|
| Computer\r and communications equipment | \r\r | \r | 8,551 | \r\r | \r | \r | 6,810 | \r|
| Construction\r in progress | \r\r | \r | 2,063 | \r\r | \r | \r | 2,721 | \r|
| Machinery\r and other equipment | \r\r | \r | 10,387 | \r\r | \r | \r | 8,080 | \r|
| \r | \r | $ | \r42,187 | \r\r | \r | $ | \r37,935 | \r|
| Accumulated\r depreciation | \r\r | \r | (26,374 | \r) | \r\r | \r | (24,949 | \r) |
| Property,\r plant, and equipment, net | \r\r | $ | \r15,813 | \r\r | \r | $ | \r12,986 | \r
\r\r
Construction\rin progress includes $1.9 million related to our Healthcare growth initiatives. All projects are expected to be completed before\rthe end of fiscal 2018.
\r\r\r\r
Supplemental\rdisclosure information of the estimated useful life of the assets:
\r\r\r\r
| Land\r improvements | \r10 years |
| Buildings and improvements | \r10 - 30 years |
| Computer and communications\r equipment | \r3 - 10 years |
| Machinery and other\r equipment | \r3 - 10 years |
\r\r
We\rreview all property, plant, and equipment for impairment when events or changes in circumstances occur which indicate a possible\rimpairment may exist. We have concluded that our property, plant, and equipment as of May 27, 2017, were not impaired.
"}]},{"name":"rpt:f-414","factDimensions":{"xbrl:concept":"rell:AccruedLiabilitiesPolicyTextBlock","xbrl:period":"2016-05-29T00:00:00/2017-05-28T00:00:00","xbrl:entity":"cik:0000355948"},"factValues":[{"value":"Accrued\rLiabilities: Accrued liabilities consist of the following (in thousands):
\r\r\r\r
| \r | \r | May\r 27, 2017 | \r\r | \r | May\r 28, 2016 | \r|||
| Compensation\r and payroll taxes | \r\r | $ | \r3,250 | \r\r | \r | $ | \r3,404 | \r|
| Accrued\r severance (1) | \r\r | \r | 706 | \r\r | \r | \r | 650 | \r|
| Professional\r fees | \r\r | \r | 535 | \r\r | \r | \r | 775 | \r|
| Deferred\r revenue | \r\r | \r | 1,460 | \r\r | \r | \r | 1,879 | \r|
| Other\r accrued expenses | \r\r | \r | 2,360 | \r\r | \r | \r | 2,427 | \r|
| Accrued\r Liabilities | \r\r | $ | \r8,311 | \r\r | \r | $ | \r9,135 | \r
\r\r
(1) In\rthe second quarter of fiscal year 2017, the Company executed a reduction in headcount to streamline operations and reduce costs\rand recorded $1.3 million of expense included in selling, general and administrative expenses for employee termination costs payable\rto terminated employees with employment and/or separation agreements with the Company. The changes in the severance accrual\rfor fiscal year 2017 included provisions and payments of $1.3 million and $1.2 million, respectively.
"}]},{"name":"rpt:f-415","factDimensions":{"xbrl:concept":"rell:OtherNoncurrentLiabilitiesPolicyPolicyTextBlock","xbrl:period":"2016-05-29T00:00:00/2017-05-28T00:00:00","xbrl:entity":"cik:0000355948"},"factValues":[{"value":"Other\rNon-Current Liabilities: Other non-current liabilities of $0.7 million at May 27, 2017, and $1.0 million at May 28,\r2016, primarily represent employee-benefits obligations in various non-US locations.
"}]},{"name":"rpt:f-416","factDimensions":{"xbrl:concept":"us-gaap:ShareBasedCompensationOptionAndIncentivePlansPolicy","xbrl:period":"2016-05-29T00:00:00/2017-05-28T00:00:00","xbrl:entity":"cik:0000355948"},"factValues":[{"value":"Share-Based\rCompensation: We measure and recognize compensation cost at fair value for all share-based payments, including stock options.\rWe estimate fair value using the Black-Scholes option-pricing model, which requires assumptions such as expected volatility, risk-free\rinterest rate, expected life, and dividends. Compensation cost is recognized using a graded-vesting schedule over the applicable\rvesting period. Share-based compensation expense totaled approximately $0.4 million during fiscal 2017, $0.5 million during fiscal\r2016, and $0.7 million during fiscal 2015.
\r\r\r\r
Stock\roptions granted generally vest over a period of five years and have contractual terms to exercise of 10 years. A summary of stock\roption activity is as follows (in thousands, except option prices and years):
\r\r\r\r
| \r | \r | Number of Options | \r \r | \r | Weighted Average\r Exercise Price | \r \r | \r | Weighted Average\r Remaining Contractual Life | \r \r | \r | Aggregate Intrinsic\r Value | \r |||||
| Options Outstanding at\r May 31, 2014 | \r\r | \r | 1,065 | \r\r | \r | $ | \r10.37 | \r\r | \r | \r | \r | \r | \r | \r | \r | |
| Granted | \r\r | \r | 225 | \r\r | \r | \r | 9.92 | \r\r | \r | \r | \r | \r | \r | \r | \r | |
| Exercised | \r\r | \r | (47 | \r) | \r\r | \r | 6.53 | \r\r | \r | \r | \r | \r | \r | \r | \r | |
| Forfeited | \r\r | \r | (34 | \r) | \r\r | \r | 11.42 | \r\r | \r | \r | \r | \r | \r | \r | \r | |
| Cancelled | \r\r | \r | (72 | \r) | \r\r | \r | 11.19 | \r\r | \r | \r | \r | \r | \r | \r | \r | |
| Options Outstanding at May 30, 2015 | \r\r | \r | 1,137 | \r\r | \r | $ | \r10.35 | \r\r | \r | \r | \r | \r | \r | \r | \r | |
| Granted | \r\r | \r | 122 | \r\r | \r | \r | 5.88 | \r\r | \r | \r | \r | \r | \r | \r | \r | |
| Exercised | \r\r | \r | (28 | \r) | \r\r | \r | 5.18 | \r\r | \r | \r | \r | \r | \r | \r | \r | |
| Forfeited | \r\r | \r | (105 | \r) | \r\r | \r | 10.98 | \r\r | \r | \r | \r | \r | \r | \r | \r | |
| Cancelled | \r\r | \r | (107 | \r) | \r\r | \r | 9.97 | \r\r | \r | \r | \r | \r | \r | \r | \r | |
| Options Outstanding at May 28, 2016 | \r\r | \r | 1,019 | \r\r | \r | $ | \r9.93 | \r\r | \r | \r | \r | \r | \r | \r | \r | |
| Granted | \r\r | \r | 190 | \r\r | \r | \r | 6.90 | \r\r | \r | \r | \r | \r | \r | \r | \r | |
| Exercised | \r\r | \r | (5 | \r) | \r\r | \r | 5.61 | \r\r | \r | \r | \r | \r | \r | \r | \r | |
| Forfeited | \r\r | \r | (43 | \r) | \r\r | \r | 8.39 | \r\r | \r | \r | \r | \r | \r | \r | \r | |
| Cancelled | \r\r | \r | (88 | \r) | \r\r | \r | 11.17 | \r\r | \r | \r | \r | \r | \r | \r | \r | |
| Options Outstanding at May 27, 2017 | \r\r | \r | 1,073 | \r\r | \r | $ | \r9.38 | \r\r | \r | \r | 6.0 | \r\r | \r | $ | \r85 | \r|
| Options Vested at May 27, 2017 | \r\r | \r | 628 | \r\r | \r | $ | \r10.21 | \r\r | \r | \r | 4.4 | \r\r | \r | $ | \r68 | \r
\r\r
There\rwere 5,000 stock options exercised during fiscal 2017, with cash received of less than $0.1 million. The total intrinsic value\rof options exercised totaled less than $0.1 million during fiscal 2017 and 2016 and $0.2 million during fiscal 2015. The weighted\raverage fair value of stock option grants was $1.14 during fiscal 2017, $1.21 during fiscal 2016, and $3.71 during fiscal 2015.\rAs of May 27, 2017, total unrecognized compensation costs related to unvested stock options was approximately $0.9 million which\ris expected to be recognized over the remaining weighted average period of approximately three to four years. The total grant\rdate fair value of stock options vested during fiscal 2017 was $0.5 million.
\r\r\r\r
The\rfair value of stock options is estimated using the Black-Scholes option-pricing model with the following weighted average assumptions:
\r\r\r\r
| \r | \r | Fiscal\r Year Ended | \r||||||||||
| \r | \r | May\r 27, 2017 | \r \r | \r | May\r 28, 2016 | \r \r | \r | May\r 30, 2015 | \r ||||
| Expected\r volatility | \r\r | \r | 25.41 | \r% | \r\r | \r | 32.21 | \r% | \r\r | \r | 46.12 | \r% |
| Risk-free\r interest rate | \r\r | \r | 1.46 | \r% | \r\r | \r | 1.78 | \r% | \r\r | \r | 2.12 | \r% |
| Expected\r lives (years) | \r\r | \r | 6.50 | \r\r | \r | \r | 6.50 | \r\r | \r | \r | 6.47 | \r|
| Annual\r cash dividend | \r\r | $ | \r0.24 | \r\r | \r | $ | \r0.24 | \r\r | \r | $ | \r0.24 | \r
\r\r
The\rexpected volatility assumptions are based on historical experience commensurate with the expected term. The risk-free interest\rrate is based on the yield of a treasury note with a remaining term equal to the expected life of the stock option.
\r\r\r\r
The\rexpected stock option life assumption is based on the Securities and Exchange Commission’s (“SEC”) guidance\rin Staff Accounting Bulletin (“SAB”) No. 107 (“SAB No. 107”). On December 21, 2007, the\rSEC issued SAB No. 110 stating that they will continue to accept SAB No. 107, past the original expiration date of December 31,\r2007. For stock options granted during fiscal years 2017, 2016, and 2015, we believe that our historical stock option experience\rdoes not provide a reasonable basis upon which to estimate expected term. We utilized the Safe Harbor option, or Simplified Method,\rto determine the expected term of these options in accordance with SAB No. 107 for options granted. We intend to continue\rto utilize the Simplified Method for future grants in accordance with SAB No. 110 until such time that we believe that our\rhistorical stock option experience will provide a reasonable basis to estimate an expected term.
\r\r\r\r
The\rfollowing table summarizes information about stock options outstanding at May 27, 2017 (in thousands, except option prices\rand years):
\r\r\r\r
| \r | \r | \r | Outstanding | \r\r | \r | Vested | \r|||||||||||||||||||||||||||
| Exercise\r Price Range | \r\r | \r | Shares | \r\r | \r | Weighted\r Average Exercise Price | \r\r | \r | Weighted\r Average Life | \r\r | \r | Aggregate\r Intrinsic Value | \r \r | \r | Shares | \r\r | \r | Weighted\r Average Exercise Price | \r\r | \r | Weighted\r Average Life | \r\r | \r | Aggregate\r Intrinsic Value | \r |||||||||
| $5.03 to\r $8.58 | \r\r | \r | \r | 429 | \r\r | \r | $ | \r6.28 | \r\r | \r | \r | 6.5 | \r\r | \r | $ | \r85 | \r\r | \r | \r | 168 | \r\r | \r | $ | \r5.84 | \r\r | \r | \r | 2.6 | \r\r | \r | $ | \r68 | \r|
| $9.48 to $11.14 | \r\r | \r | \r | 350 | \r\r | \r | $ | \r10.50 | \r\r | \r | \r | 6.7 | \r\r | \r | $ | \r— | \r\r | \r | \r | 184 | \r\r | \r | $ | \r10.62 | \r\r | \r | \r | 6.5 | \r\r | \r | $ | \r— | \r|
| $11.50\r to $13.76 | \r\r | \r | \r | 294 | \r\r | \r | $ | \r12.55 | \r\r | \r | \r | 4.3 | \r\r | \r | $ | \r— | \r\r | \r | \r | 276 | \r\r | \r | $ | \r12.60 | \r\r | \r | \r | 4.2 | \r\r | \r | $ | \r— | \r|
| Total | \r\r | \r | \r | 1,073 | \r\r | \r | $ | \r9.38 | \r\r | \r | \r | 6.0 | \r\r | \r | $ | \r85 | \r\r | \r | \r | 628 | \r\r | \r | $ | \r10.21 | \r\r | \r | \r | 4.4 | \r\r | \r | $ | \r68 | \r
\r\r
As\rof May 27, 2017, we did not have any unvested restricted shares.
\r\r\r\r
Compensation\reffects arising from issuing stock awards have been charged against income and recorded as additional paid-in-capital in the consolidated\rstatements of stockholder’s equity during fiscal 2017, 2016, and 2015.
\r\r\r\r
The\rEmployees’ 2011 Long-Term Incentive Compensation Plan authorizes the issuance of up to 1,500,000 shares as incentive stock\roptions, non-qualified stock options, or stock awards. Under this plan, 850,000 shares are reserved for future issuance.\rThe Plan authorizes the granting of stock options at the fair market value at the date of grant. Generally, these options become\rexercisable over five years and expire up to 10 years from the date of grant.
"}]},{"name":"rpt:f-417","factDimensions":{"xbrl:concept":"us-gaap:EarningsPerSharePolicyTextBlock","xbrl:period":"2016-05-29T00:00:00/2017-05-28T00:00:00","xbrl:entity":"cik:0000355948"},"factValues":[{"value":"Earnings\rper Share: We have authorized 17,000,000 shares of common stock, and 3,000,000 shares of Class B common stock. The Class B\rcommon stock has 10 votes per share and has transferability restrictions; however, Class B common stock may be converted into\rcommon stock on a share-for-share basis at any time. With respect to dividends and distributions, shares of common stock and Class\rB common stock rank equally and have the same rights, except that Class B common stock cash dividends are limited to 90% of the\ramount of Class A common stock cash dividends.
\r\r\r\r
In\raccordance with ASC 260-10, Earnings Per Share (“ASC 260”), our Class B common stock is considered a participating\rsecurity requiring the use of the two-class method for the computation of basic and diluted earnings per share. The two-class\rcomputation method for each period reflects the cash dividends paid per share for each class of stock, plus the amount of allocated\rundistributed earnings per share computed using the participation percentage which reflects the dividend rights of each class\rof stock. Basic and diluted earnings per share were computed using the two-class method as prescribed in ASC 260. The shares of\rClass B common stock are considered to be participating convertible securities since the shares of Class B common stock are convertible\ron a share-for-share basis into shares of common stock and may participate in dividends with common stock according to a predetermined\rformula which is 90% of the amount of Class A common stock cash dividends.
\r\r\r\r
The\rper share amounts presented in the consolidated statements of comprehensive loss are based on the following (amounts in thousands,\rexcept per share amounts):
\r\r\r\r
| \r | \r | For\r the Fiscal Year Ended | \r||||||||||||||||||||||
| \r | \r | May\r 27, 2017 | \r\r | \r | May\r 28, 2016 | \r\r | \r | May\r 30, 2015 | \r||||||||||||||||
| \r | \r | Basic | \r\r | \r | Diluted | \r\r | \r | Basic | \r\r | \r | Diluted | \r\r | \r | Basic | \r\r | \r | Diluted | \r|||||||
| Numerator\r for Basic and Diluted EPS: | \r\r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | |
| Loss\r from continuing operations | \r\r | $ | \r(6,928 | \r) | \r\r | $ | \r(6,928 | \r) | \r\r | $ | \r(6,766 | \r) | \r\r | $ | \r(6,766 | \r) | \r\r | $ | \r(5,528 | \r) | \r\r | $ | \r(5,528 | \r) |
| Less\r dividends: | \r\r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | |
| Common\r stock | \r\r | \r | 2,567 | \r\r | \r | \r | 2,567 | \r\r | \r | \r | 2,615 | \r\r | \r | \r | 2,615 | \r\r | \r | \r | 2,794 | \r\r | \r | \r | 2,794 | \r|
| Class\r B common stock | \r\r | \r | 464 | \r\r | \r | \r | 464 | \r\r | \r | \r | 464 | \r\r | \r | \r | 464 | \r\r | \r | \r | 466 | \r\r | \r | \r | 466 | \r|
| Undistributed\r losses | \r\r | $ | \r(9,959 | \r) | \r\r | $ | \r(9,959 | \r) | \r\r | $ | \r(9,845 | \r) | \r\r | $ | \r(9,845 | \r) | \r\r | $ | \r(8,788 | \r) | \r\r | $ | \r(8,788 | \r) |
| Common\r stock undistributed losses | \r\r | $ | \r(8,440 | \r) | \r\r | $ | \r(8,440 | \r) | \r\r | $ | \r(8,367 | \r) | \r\r | $ | \r(8,367 | \r) | \r\r | $ | \r(7,539 | \r) | \r\r | $ | \r(7,539 | \r) |
| Class\r B common stock undistributed losses | \r\r | \r | (1,519 | \r) | \r\r | \r | (1,519 | \r) | \r\r | \r | (1,478 | \r) | \r\r | \r | (1,478 | \r) | \r\r | \r | (1,249 | \r) | \r\r | \r | (1,249 | \r) |
| Total\r undistributed losses | \r\r | $ | \r(9,959 | \r) | \r\r | $ | \r(9,959 | \r) | \r\r | $ | \r(9,845 | \r) | \r\r | $ | \r(9,845 | \r) | \r\r | $ | \r(8,788 | \r) | \r\r | $ | \r(8,788 | \r) |
| Loss\r from discontinued operations | \r\r | $ | \r— | \r\r | \r | $ | \r— | \r\r | \r | $ | \r— | \r\r | \r | $ | \r— | \r\r | \r | $ | \r(31 | \r) | \r\r | $ | \r(31 | \r) |
| Less\r dividends: | \r\r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | |
| Common\r stock | \r\r | \r | 2,567 | \r\r | \r | \r | 2,567 | \r\r | \r | \r | 2,615 | \r\r | \r | \r | 2,615 | \r\r | \r | \r | 2,794 | \r\r | \r | \r | 2,794 | \r|
| Class\r B common stock | \r\r | \r | 464 | \r\r | \r | \r | 464 | \r\r | \r | \r | 464 | \r\r | \r | \r | 464 | \r\r | \r | \r | 466 | \r\r | \r | \r | 466 | \r|
| Undistributed\r losses | \r\r | $ | \r(3,031 | \r) | \r\r | $ | \r(3,031 | \r) | \r\r | $ | \r(3,079 | \r) | \r\r | $ | \r(3,079 | \r) | \r\r | $ | \r(3,291 | \r) | \r\r | $ | \r(3,291 | \r) |
| Common\r stock undistributed losses | \r\r | $ | \r(2,567 | \r) | \r\r | $ | \r(2,567 | \r) | \r\r | $ | \r(2,615 | \r) | \r\r | $ | \r(2,615 | \r) | \r\r | $ | \r(2,823 | \r) | \r\r | $ | \r(2,823 | \r) |
| Class\r B common stock undistributed losses | \r\r | \r | (464 | \r) | \r\r | \r | (464 | \r) | \r\r | \r | (464 | \r) | \r\r | \r | (464 | \r) | \r\r | \r | (468 | \r) | \r\r | \r | (468 | \r) |
| Total\r undistributed losses | \r\r | $ | \r(3,031 | \r) | \r\r | $ | \r(3,031 | \r) | \r\r | $ | \r(3,079 | \r) | \r\r | $ | \r(3,079 | \r) | \r\r | $ | \r(3,291 | \r) | \r\r | $ | \r(3,291 | \r) |
| Net\r loss | \r\r | $ | \r(6,928 | \r) | \r\r | $ | \r(6,928 | \r) | \r\r | $ | \r(6,766 | \r) | \r\r | $ | \r(6,766 | \r) | \r\r | $ | \r(5,559 | \r) | \r\r | $ | \r(5,559 | \r) |
| Less\r dividends: | \r\r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | |
| Common\r stock | \r\r | \r | 2,567 | \r\r | \r | \r | 2,567 | \r\r | \r | \r | 2,615 | \r\r | \r | \r | 2,615 | \r\r | \r | \r | 2,794 | \r\r | \r | \r | 2,794 | \r|
| Class\r B common stock | \r\r | \r | 464 | \r\r | \r | \r | 464 | \r\r | \r | \r | 464 | \r\r | \r | \r | 464 | \r\r | \r | \r | 466 | \r\r | \r | \r | 466 | \r|
| Undistributed\r losses | \r\r | $ | \r(9,959 | \r) | \r\r | $ | \r(9,959 | \r) | \r\r | $ | \r(9,845 | \r) | \r\r | $ | \r(9,845 | \r) | \r\r | $ | \r(8,819 | \r) | \r\r | $ | \r(8,819 | \r) |
| Common\r stock undistributed losses | \r\r | $ | \r(8,440 | \r) | \r\r | $ | \r(8,440 | \r) | \r\r | $ | \r(8,367 | \r) | \r\r | $ | \r(8,367 | \r) | \r\r | $ | \r(7,565 | \r) | \r\r | $ | \r(7,565 | \r) |
| Class\r B common stock undistributed losses | \r\r | \r | (1,519 | \r) | \r\r | \r | (1,519 | \r) | \r\r | \r | (1,478 | \r) | \r\r | \r | (1,478 | \r) | \r\r | \r | (1,254 | \r) | \r\r | \r | (1,254 | \r) |
| Total\r undistributed losses | \r\r | $ | \r(9,959 | \r) | \r\r | $ | \r(9,959 | \r) | \r\r | $ | \r(9,845 | \r) | \r\r | $ | \r(9,845 | \r) | \r\r | $ | \r(8,819 | \r) | \r\r | $ | \r(8,819 | \r) |
| Denominator\r for Basic and Diluted EPS: | \r\r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | |
| Common\r stock weighted average shares | \r\r | \r | 10,705 | \r\r | \r | \r | 10,705 | \r\r | \r | \r | 10,908 | \r\r | \r | \r | 10,908 | \r\r | \r | \r | 11,682 | \r\r | \r | \r | 11,682 | \r|
| Class\r B common stock weighted average shares, and shares under if-converted method for diluted EPS | \r\r | \r | 2,140 | \r\r | \r | \r | 2,140 | \r\r | \r | \r | 2,141 | \r\r | \r | \r | 2,141 | \r\r | \r | \r | 2,151 | \r\r | \r | \r | 2,151 | \r|
| Effect\r of dilutive stock options | \r\r | \r | \r | \r | \r | \r | — | \r\r | \r | \r | \r | \r | \r | \r | — | \r\r | \r | \r | \r | \r | \r | \r | — | \r|
| Denominator\r for diluted EPS adjusted for weighted average shares and assumed conversions | \r\r | \r | \r | \r | \r | \r | 12,845 | \r\r | \r | \r | \r | \r | \r | \r | 13,049 | \r\r | \r | \r | \r | \r | \r | \r | 13,833 | \r|
| Loss\r from continuing operations per share: | \r\r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | |
| Common\r stock | \r\r | $ | \r(0.55 | \r) | \r\r | $ | \r(0.55 | \r) | \r\r | $ | \r(0.53 | \r) | \r\r | $ | \r(0.53 | \r) | \r\r | $ | \r(0.41 | \r) | \r\r | $ | \r(0.41 | \r) |
| Class\r B common stock | \r\r | $ | \r(0.49 | \r) | \r\r | $ | \r(0.49 | \r) | \r\r | $ | \r(0.47 | \r) | \r\r | $ | \r(0.47 | \r) | \r\r | $ | \r(0.36 | \r) | \r\r | $ | \r(0.36 | \r) |
| Income\r from discontinued operations per share: | \r\r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | |
| Common\r stock | \r\r | $ | \r— | \r\r | \r | $ | \r— | \r\r | \r | $ | \r— | \r\r | \r | $ | \r— | \r\r | \r | $ | \r— | \r\r | \r | $ | \r— | \r|
| Class\r B common stock | \r\r | $ | \r— | \r\r | \r | $ | \r— | \r\r | \r | $ | \r— | \r\r | \r | $ | \r— | \r\r | \r | $ | \r— | \r\r | \r | $ | \r— | \r|
| Net\r loss per share: | \r\r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | |
| Common\r stock | \r\r | $ | \r(0.55 | \r) | \r\r | $ | \r(0.55 | \r) | \r\r | $ | \r(0.53 | \r) | \r\r | $ | \r(0.53 | \r) | \r\r | $ | \r(0.41 | \r) | \r\r | $ | \r(0.41 | \r) |
| Class\r B common stock | \r\r | $ | \r(0.49 | \r) | \r\r | $ | \r(0.49 | \r) | \r\r | $ | \r(0.47 | \r) | \r\r | $ | \r(0.47 | \r) | \r\r | $ | \r(0.36 | \r) | \r\r | $ | \r(0.36 | \r) |
\r\r
Note:\rCommon stock options that were anti-dilutive and not included in diluted earnings per common share for fiscal 2017, fiscal 2016,\rand fiscal 2015 were 848; 890; and 881 respectively.
"}]},{"name":"rpt:f-418","factDimensions":{"xbrl:concept":"us-gaap:PropertyPlantAndEquipmentTextBlock","xbrl:period":"2016-05-29T00:00:00/2017-05-28T00:00:00","xbrl:entity":"cik:0000355948"},"factValues":[{"value":"Property,\rplant and equipment consist of the following (in thousands):
\r\r\r\r
| \r | \r | May\r 27, 2017 | \r \r | \r | May\r 28, 2016 | \r |||
| Land\r and improvements | \r\r | $ | \r1,301 | \r\r | \r | $ | \r1,301 | \r|
| Buildings\r and improvements | \r\r | \r | 19,885 | \r\r | \r | \r | 19,023 | \r|
| Computer\r and communications equipment | \r\r | \r | 8,551 | \r\r | \r | \r | 6,810 | \r|
| Construction\r in progress | \r\r | \r | 2,063 | \r\r | \r | \r | 2,721 | \r|
| Machinery\r and other equipment | \r\r | \r | 10,387 | \r\r | \r | \r | 8,080 | \r|
| \r | \r | $ | \r42,187 | \r\r | \r | $ | \r37,935 | \r|
| Accumulated\r depreciation | \r\r | \r | (26,374 | \r) | \r\r | \r | (24,949 | \r) |
| Property,\r plant, and equipment, net | \r\r | $ | \r15,813 | \r\r | \r | $ | \r12,986 | \r
Supplemental\rdisclosure information of the estimated useful life of the assets:
\r\r\r\r
| Land\r improvements | \r10 years |
| Buildings and improvements | \r10 - 30 years |
| Computer and communications\r equipment | \r3 - 10 years |
| Machinery and other\r equipment | \r3 - 10 years |
Accrued\rliabilities consist of the following (in thousands):
\r\r\r\r
| \r | \r | May\r 27, 2017 | \r\r | \r | May\r 28, 2016 | \r|||
| Compensation\r and payroll taxes | \r\r | $ | \r3,250 | \r\r | \r | $ | \r3,404 | \r|
| Accrued\r severance (1) | \r\r | \r | 706 | \r\r | \r | \r | 650 | \r|
| Professional\r fees | \r\r | \r | 535 | \r\r | \r | \r | 775 | \r|
| Deferred\r revenue | \r\r | \r | 1,460 | \r\r | \r | \r | 1,879 | \r|
| Other\r accrued expenses | \r\r | \r | 2,360 | \r\r | \r | \r | 2,427 | \r|
| Accrued\r Liabilities | \r\r | $ | \r8,311 | \r\r | \r | $ | \r9,135 | \r
\r\r
(1) In\rthe second quarter of fiscal year 2017, the Company executed a reduction in headcount to streamline operations and reduce costs\rand recorded $1.3 million of expense included in selling, general and administrative expenses for employee termination costs payable\rto terminated employees with employment and/or separation agreements with the Company. The changes in the severance accrual\rfor fiscal year 2017 included provisions and payments of $1.3 million and $1.2 million, respectively.
"}]},{"name":"rpt:f-421","factDimensions":{"xbrl:concept":"us-gaap:ScheduleOfShareBasedCompensationStockOptionsActivityTableTextBlock","xbrl:period":"2016-05-29T00:00:00/2017-05-28T00:00:00","xbrl:entity":"cik:0000355948"},"factValues":[{"value":"A\rsummary of stock option activity is as follows (in thousands, except option prices and years):
\r\r\r\r
| \r | \r | Number of Options | \r \r | \r | Weighted Average\r Exercise Price | \r \r | \r | Weighted Average\r Remaining Contractual Life | \r \r | \r | Aggregate Intrinsic\r Value | \r |||||
| Options Outstanding at\r May 31, 2014 | \r\r | \r | 1,065 | \r\r | \r | $ | \r10.37 | \r\r | \r | \r | \r | \r | \r | \r | \r | |
| Granted | \r\r | \r | 225 | \r\r | \r | \r | 9.92 | \r\r | \r | \r | \r | \r | \r | \r | \r | |
| Exercised | \r\r | \r | (47 | \r) | \r\r | \r | 6.53 | \r\r | \r | \r | \r | \r | \r | \r | \r | |
| Forfeited | \r\r | \r | (34 | \r) | \r\r | \r | 11.42 | \r\r | \r | \r | \r | \r | \r | \r | \r | |
| Cancelled | \r\r | \r | (72 | \r) | \r\r | \r | 11.19 | \r\r | \r | \r | \r | \r | \r | \r | \r | |
| Options Outstanding at May 30, 2015 | \r\r | \r | 1,137 | \r\r | \r | $ | \r10.35 | \r\r | \r | \r | \r | \r | \r | \r | \r | |
| Granted | \r\r | \r | 122 | \r\r | \r | \r | 5.88 | \r\r | \r | \r | \r | \r | \r | \r | \r | |
| Exercised | \r\r | \r | (28 | \r) | \r\r | \r | 5.18 | \r\r | \r | \r | \r | \r | \r | \r | \r | |
| Forfeited | \r\r | \r | (105 | \r) | \r\r | \r | 10.98 | \r\r | \r | \r | \r | \r | \r | \r | \r | |
| Cancelled | \r\r | \r | (107 | \r) | \r\r | \r | 9.97 | \r\r | \r | \r | \r | \r | \r | \r | \r | |
| Options Outstanding at May 28, 2016 | \r\r | \r | 1,019 | \r\r | \r | $ | \r9.93 | \r\r | \r | \r | \r | \r | \r | \r | \r | |
| Granted | \r\r | \r | 190 | \r\r | \r | \r | 6.90 | \r\r | \r | \r | \r | \r | \r | \r | \r | |
| Exercised | \r\r | \r | (5 | \r) | \r\r | \r | 5.61 | \r\r | \r | \r | \r | \r | \r | \r | \r | |
| Forfeited | \r\r | \r | (43 | \r) | \r\r | \r | 8.39 | \r\r | \r | \r | \r | \r | \r | \r | \r | |
| Cancelled | \r\r | \r | (88 | \r) | \r\r | \r | 11.17 | \r\r | \r | \r | \r | \r | \r | \r | \r | |
| Options Outstanding at May 27, 2017 | \r\r | \r | 1,073 | \r\r | \r | $ | \r9.38 | \r\r | \r | \r | 6.0 | \r\r | \r | $ | \r85 | \r|
| Options Vested at May 27, 2017 | \r\r | \r | 628 | \r\r | \r | $ | \r10.21 | \r\r | \r | \r | 4.4 | \r\r | \r | $ | \r68 | \r
The\rfair value of stock options is estimated using the Black-Scholes option-pricing model with the following weighted average assumptions:
\r\r\r\r
| \r | \r | Fiscal\r Year Ended | \r||||||||||
| \r | \r | May\r 27, 2017 | \r \r | \r | May\r 28, 2016 | \r \r | \r | May\r 30, 2015 | \r ||||
| Expected\r volatility | \r\r | \r | 25.41 | \r% | \r\r | \r | 32.21 | \r% | \r\r | \r | 46.12 | \r% |
| Risk-free\r interest rate | \r\r | \r | 1.46 | \r% | \r\r | \r | 1.78 | \r% | \r\r | \r | 2.12 | \r% |
| Expected\r lives (years) | \r\r | \r | 6.50 | \r\r | \r | \r | 6.50 | \r\r | \r | \r | 6.47 | \r|
| Annual\r cash dividend | \r\r | $ | \r0.24 | \r\r | \r | $ | \r0.24 | \r\r | \r | $ | \r0.24 | \r
The\rfollowing table summarizes information about stock options outstanding at May 27, 2017 (in thousands, except option prices\rand years):
\r\r\r\r
| \r | \r | \r | Outstanding | \r\r | \r | Vested | \r|||||||||||||||||||||||||||
| Exercise\r Price Range | \r\r | \r | Shares | \r\r | \r | Weighted\r Average Exercise Price | \r\r | \r | Weighted\r Average Life | \r\r | \r | Aggregate\r Intrinsic Value | \r \r | \r | Shares | \r\r | \r | Weighted\r Average Exercise Price | \r\r | \r | Weighted\r Average Life | \r\r | \r | Aggregate\r Intrinsic Value | \r |||||||||
| $5.03 to\r $8.58 | \r\r | \r | \r | 429 | \r\r | \r | $ | \r6.28 | \r\r | \r | \r | 6.5 | \r\r | \r | $ | \r85 | \r\r | \r | \r | 168 | \r\r | \r | $ | \r5.84 | \r\r | \r | \r | 2.6 | \r\r | \r | $ | \r68 | \r|
| $9.48 to $11.14 | \r\r | \r | \r | 350 | \r\r | \r | $ | \r10.50 | \r\r | \r | \r | 6.7 | \r\r | \r | $ | \r— | \r\r | \r | \r | 184 | \r\r | \r | $ | \r10.62 | \r\r | \r | \r | 6.5 | \r\r | \r | $ | \r— | \r|
| $11.50\r to $13.76 | \r\r | \r | \r | 294 | \r\r | \r | $ | \r12.55 | \r\r | \r | \r | 4.3 | \r\r | \r | $ | \r— | \r\r | \r | \r | 276 | \r\r | \r | $ | \r12.60 | \r\r | \r | \r | 4.2 | \r\r | \r | $ | \r— | \r|
| Total | \r\r | \r | \r | 1,073 | \r\r | \r | $ | \r9.38 | \r\r | \r | \r | 6.0 | \r\r | \r | $ | \r85 | \r\r | \r | \r | 628 | \r\r | \r | $ | \r10.21 | \r\r | \r | \r | 4.4 | \r\r | \r | $ | \r68 | \r
The\rper share amounts presented in the consolidated statements of comprehensive loss are based on the following (amounts in thousands,\rexcept per share amounts):
\r\r\r\r
| \r | \r | For\r the Fiscal Year Ended | \r||||||||||||||||||||||
| \r | \r | May\r 27, 2017 | \r\r | \r | May\r 28, 2016 | \r\r | \r | May\r 30, 2015 | \r||||||||||||||||
| \r | \r | Basic | \r\r | \r | Diluted | \r\r | \r | Basic | \r\r | \r | Diluted | \r\r | \r | Basic | \r\r | \r | Diluted | \r|||||||
| Numerator\r for Basic and Diluted EPS: | \r\r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | |
| Loss\r from continuing operations | \r\r | $ | \r(6,928 | \r) | \r\r | $ | \r(6,928 | \r) | \r\r | $ | \r(6,766 | \r) | \r\r | $ | \r(6,766 | \r) | \r\r | $ | \r(5,528 | \r) | \r\r | $ | \r(5,528 | \r) |
| Less\r dividends: | \r\r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | |
| Common\r stock | \r\r | \r | 2,567 | \r\r | \r | \r | 2,567 | \r\r | \r | \r | 2,615 | \r\r | \r | \r | 2,615 | \r\r | \r | \r | 2,794 | \r\r | \r | \r | 2,794 | \r|
| Class\r B common stock | \r\r | \r | 464 | \r\r | \r | \r | 464 | \r\r | \r | \r | 464 | \r\r | \r | \r | 464 | \r\r | \r | \r | 466 | \r\r | \r | \r | 466 | \r|
| Undistributed\r losses | \r\r | $ | \r(9,959 | \r) | \r\r | $ | \r(9,959 | \r) | \r\r | $ | \r(9,845 | \r) | \r\r | $ | \r(9,845 | \r) | \r\r | $ | \r(8,788 | \r) | \r\r | $ | \r(8,788 | \r) |
| Common\r stock undistributed losses | \r\r | $ | \r(8,440 | \r) | \r\r | $ | \r(8,440 | \r) | \r\r | $ | \r(8,367 | \r) | \r\r | $ | \r(8,367 | \r) | \r\r | $ | \r(7,539 | \r) | \r\r | $ | \r(7,539 | \r) |
| Class\r B common stock undistributed losses | \r\r | \r | (1,519 | \r) | \r\r | \r | (1,519 | \r) | \r\r | \r | (1,478 | \r) | \r\r | \r | (1,478 | \r) | \r\r | \r | (1,249 | \r) | \r\r | \r | (1,249 | \r) |
| Total\r undistributed losses | \r\r | $ | \r(9,959 | \r) | \r\r | $ | \r(9,959 | \r) | \r\r | $ | \r(9,845 | \r) | \r\r | $ | \r(9,845 | \r) | \r\r | $ | \r(8,788 | \r) | \r\r | $ | \r(8,788 | \r) |
| Loss\r from discontinued operations | \r\r | $ | \r— | \r\r | \r | $ | \r— | \r\r | \r | $ | \r— | \r\r | \r | $ | \r— | \r\r | \r | $ | \r(31 | \r) | \r\r | $ | \r(31 | \r) |
| Less\r dividends: | \r\r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | |
| Common\r stock | \r\r | \r | 2,567 | \r\r | \r | \r | 2,567 | \r\r | \r | \r | 2,615 | \r\r | \r | \r | 2,615 | \r\r | \r | \r | 2,794 | \r\r | \r | \r | 2,794 | \r|
| Class\r B common stock | \r\r | \r | 464 | \r\r | \r | \r | 464 | \r\r | \r | \r | 464 | \r\r | \r | \r | 464 | \r\r | \r | \r | 466 | \r\r | \r | \r | 466 | \r|
| Undistributed\r losses | \r\r | $ | \r(3,031 | \r) | \r\r | $ | \r(3,031 | \r) | \r\r | $ | \r(3,079 | \r) | \r\r | $ | \r(3,079 | \r) | \r\r | $ | \r(3,291 | \r) | \r\r | $ | \r(3,291 | \r) |
| Common\r stock undistributed losses | \r\r | $ | \r(2,567 | \r) | \r\r | $ | \r(2,567 | \r) | \r\r | $ | \r(2,615 | \r) | \r\r | $ | \r(2,615 | \r) | \r\r | $ | \r(2,823 | \r) | \r\r | $ | \r(2,823 | \r) |
| Class\r B common stock undistributed losses | \r\r | \r | (464 | \r) | \r\r | \r | (464 | \r) | \r\r | \r | (464 | \r) | \r\r | \r | (464 | \r) | \r\r | \r | (468 | \r) | \r\r | \r | (468 | \r) |
| Total\r undistributed losses | \r\r | $ | \r(3,031 | \r) | \r\r | $ | \r(3,031 | \r) | \r\r | $ | \r(3,079 | \r) | \r\r | $ | \r(3,079 | \r) | \r\r | $ | \r(3,291 | \r) | \r\r | $ | \r(3,291 | \r) |
| Net\r loss | \r\r | $ | \r(6,928 | \r) | \r\r | $ | \r(6,928 | \r) | \r\r | $ | \r(6,766 | \r) | \r\r | $ | \r(6,766 | \r) | \r\r | $ | \r(5,559 | \r) | \r\r | $ | \r(5,559 | \r) |
| Less\r dividends: | \r\r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | |
| Common\r stock | \r\r | \r | 2,567 | \r\r | \r | \r | 2,567 | \r\r | \r | \r | 2,615 | \r\r | \r | \r | 2,615 | \r\r | \r | \r | 2,794 | \r\r | \r | \r | 2,794 | \r|
| Class\r B common stock | \r\r | \r | 464 | \r\r | \r | \r | 464 | \r\r | \r | \r | 464 | \r\r | \r | \r | 464 | \r\r | \r | \r | 466 | \r\r | \r | \r | 466 | \r|
| Undistributed\r losses | \r\r | $ | \r(9,959 | \r) | \r\r | $ | \r(9,959 | \r) | \r\r | $ | \r(9,845 | \r) | \r\r | $ | \r(9,845 | \r) | \r\r | $ | \r(8,819 | \r) | \r\r | $ | \r(8,819 | \r) |
| Common\r stock undistributed losses | \r\r | $ | \r(8,440 | \r) | \r\r | $ | \r(8,440 | \r) | \r\r | $ | \r(8,367 | \r) | \r\r | $ | \r(8,367 | \r) | \r\r | $ | \r(7,565 | \r) | \r\r | $ | \r(7,565 | \r) |
| Class\r B common stock undistributed losses | \r\r | \r | (1,519 | \r) | \r\r | \r | (1,519 | \r) | \r\r | \r | (1,478 | \r) | \r\r | \r | (1,478 | \r) | \r\r | \r | (1,254 | \r) | \r\r | \r | (1,254 | \r) |
| Total\r undistributed losses | \r\r | $ | \r(9,959 | \r) | \r\r | $ | \r(9,959 | \r) | \r\r | $ | \r(9,845 | \r) | \r\r | $ | \r(9,845 | \r) | \r\r | $ | \r(8,819 | \r) | \r\r | $ | \r(8,819 | \r) |
| Denominator\r for Basic and Diluted EPS: | \r\r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | |
| Common\r stock weighted average shares | \r\r | \r | 10,705 | \r\r | \r | \r | 10,705 | \r\r | \r | \r | 10,908 | \r\r | \r | \r | 10,908 | \r\r | \r | \r | 11,682 | \r\r | \r | \r | 11,682 | \r|
| Class\r B common stock weighted average shares, and shares under if-converted method for diluted EPS | \r\r | \r | 2,140 | \r\r | \r | \r | 2,140 | \r\r | \r | \r | 2,141 | \r\r | \r | \r | 2,141 | \r\r | \r | \r | 2,151 | \r\r | \r | \r | 2,151 | \r|
| Effect\r of dilutive stock options | \r\r | \r | \r | \r | \r | \r | — | \r\r | \r | \r | \r | \r | \r | \r | — | \r\r | \r | \r | \r | \r | \r | \r | — | \r|
| Denominator\r for diluted EPS adjusted for weighted average shares and assumed conversions | \r\r | \r | \r | \r | \r | \r | 12,845 | \r\r | \r | \r | \r | \r | \r | \r | 13,049 | \r\r | \r | \r | \r | \r | \r | \r | 13,833 | \r|
| Loss\r from continuing operations per share: | \r\r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | |
| Common\r stock | \r\r | $ | \r(0.55 | \r) | \r\r | $ | \r(0.55 | \r) | \r\r | $ | \r(0.53 | \r) | \r\r | $ | \r(0.53 | \r) | \r\r | $ | \r(0.41 | \r) | \r\r | $ | \r(0.41 | \r) |
| Class\r B common stock | \r\r | $ | \r(0.49 | \r) | \r\r | $ | \r(0.49 | \r) | \r\r | $ | \r(0.47 | \r) | \r\r | $ | \r(0.47 | \r) | \r\r | $ | \r(0.36 | \r) | \r\r | $ | \r(0.36 | \r) |
| Income\r from discontinued operations per share: | \r\r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | |
| Common\r stock | \r\r | $ | \r— | \r\r | \r | $ | \r— | \r\r | \r | $ | \r— | \r\r | \r | $ | \r— | \r\r | \r | $ | \r— | \r\r | \r | $ | \r— | \r|
| Class\r B common stock | \r\r | $ | \r— | \r\r | \r | $ | \r— | \r\r | \r | $ | \r— | \r\r | \r | $ | \r— | \r\r | \r | $ | \r— | \r\r | \r | $ | \r— | \r|
| Net\r loss per share: | \r\r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | |
| Common\r stock | \r\r | $ | \r(0.55 | \r) | \r\r | $ | \r(0.55 | \r) | \r\r | $ | \r(0.53 | \r) | \r\r | $ | \r(0.53 | \r) | \r\r | $ | \r(0.41 | \r) | \r\r | $ | \r(0.41 | \r) |
| Class\r B common stock | \r\r | $ | \r(0.49 | \r) | \r\r | $ | \r(0.49 | \r) | \r\r | $ | \r(0.47 | \r) | \r\r | $ | \r(0.47 | \r) | \r\r | $ | \r(0.36 | \r) | \r\r | $ | \r(0.36 | \r) |
\r\r
Note:\rCommon stock options that were anti-dilutive and not included in diluted earnings per common share for fiscal 2017, fiscal 2016,\rand fiscal 2015 were 848; 890; and 881 respectively.
"}]},{"name":"rpt:f-425","factDimensions":{"xbrl:concept":"us-gaap:ScheduleOfBusinessAcquisitionsByAcquisitionTextBlock","xbrl:period":"2016-05-29T00:00:00/2017-05-28T00:00:00","xbrl:entity":"cik:0000355948"},"factValues":[{"value":"The\rfollowing table summarizes the fair values of the assets acquired at the date of the closing of the acquisition (in thousands):
\r\r\r\r
| Accounts\r receivable | \r\r | $ | \r737 | \r|
| Inventories | \r\r | \r | 1,420 | \r|
| Property,\r plant and equipment | \r\r | \r | 230 | \r|
| Goodwill | \r\r | \r | 6,332 | \r|
| Other\r intangibles | \r\r | \r | 3,490 | \r|
| Net\r assets acquired | \r\r | $ | \r12,209 | \r
The\rfollowing unaudited pro forma information represents the Company’s results of operations as if the acquisitions had occurred\ras of June 1, 2014:
\r\r\r\r
| $ in\r thousands, except per share amounts | \r\r | For\r the year ended May 30, 2015 | \r ||
| Net\r sales | \r\r | $ | \r145,136 | \r|
| Net\r loss | \r\r | $ | \r(3,666 | \r) |
| Earnings\r per share: | \r\r | \r | \r | |
| Common\r shares - Basic | \r\r | $ | \r(0.27 | \r) |
| Class\r B common shares - Basic | \r\r | $ | \r(0.24 | \r) |
| Common\r shares - Diluted | \r\r | $ | \r(0.27 | \r) |
| Class\r B common shares - Diluted | \r\r | $ | \r(0.24 | \r) |
Intangible\rassets subject to amortization as well as amortization expense are as follows (in thousands):
\r\r\r\r
| \r | \r | Intangible Assets Subject\r to Amortization as of | \r ||||||
| \r | \r | May\r 27, 2017 | \r \r | \r | May\r 28, 2016 | \r |||
| Gross\r Amounts: | \r\r | \r | \r | \r | \r | \r | \r | |
| Trade\r Name | \r\r | $ | \r659 | \r\r | \r | $ | \r659 | \r|
| Customer\r Relationships | \r\r | \r | 3,397 | \r\r | \r | \r | 3,434 | \r|
| Non-compete\r Agreements | \r\r | \r | 177 | \r\r | \r | \r | 177 | \r|
| Technology | \r\r | \r | 230 | \r\r | \r | \r | 230 | \r|
| Total\r Gross Amounts | \r\r | $ | \r4,463 | \r\r | \r | $ | \r4,500 | \r|
| Accumulated\r Amortization: | \r\r | \r | \r | \r | \r | \r | \r | |
| Trade\r Name | \r\r | $ | \r441 | \r\r | \r | $ | \r231 | \r|
| Customer\r Relationships | \r\r | \r | 446 | \r\r | \r | \r | 374 | \r|
| Non-compete\r Agreements | \r\r | \r | 84 | \r\r | \r | \r | 55 | \r|
| Technology | \r\r | \r | 51 | \r\r | \r | \r | 22 | \r|
| Total\r Accumulated Amortization | \r\r | $ | \r1,022 | \r\r | \r | $ | \r682 | \r|
| \r | \r | \r | \r | \r | \r | \r | \r | |
| Net\r Intangibles | \r\r | $ | \r3,441 | \r\r | \r | $ | \r3,818 |
The\ramortization expense associated with the intangible assets subject to amortization for the next five years is presented in the\rfollowing table (in thousands):
\r\r\r\r
| \r | \r | \r | Amortization Expense | \r ||
| Fiscal\r Year | \r\r | \r | \r | \r | |
| 2018 | \r\r | \r | $ | \r432 | \r|
| 2019 | \r\r | \r | \r | 245 | \r|
| 2020 | \r\r | \r | \r | 257 | \r|
| 2021 | \r\r | \r | \r | 245 | \r|
| 2022 | \r\r | \r | \r | 252 | \r|
| Thereafter | \r\r | \r | \r | 2,010 | \r|
| Total\r amortization expense | \r\r | \r | $ | \r3,441 | \r
Our\rfuture lease commitments for minimum rentals, including common area maintenance charges and property taxes during the next five\ryears are as follows (in thousands):
\r\r\r\r
| Fiscal\r Year | \r\r | Payments | \r||
| 2018 | \r\r | $ | \r1,607 | \r|
| 2019 | \r\r | \r | 1,407 | \r|
| 2020 | \r\r | \r | 1,108 | \r|
| 2021 | \r\r | \r | 805 | \r|
| 2022 | \r\r | \r | 161 | \r|
| Thereafter | \r\r | \r | 183 |
Loss\rfrom continuing operations before income taxes includes the following components (in thousands):
\r\r\r\r
| \r | \r | Fiscal\r Year Ended | \r||||||||||
| \r | \r | May\r 27, 2017 | \r \r | \r | May\r 28, 2016 | \r \r | \r | May\r 30, 2015 | \r ||||
| United\r States | \r\r | $ | \r(8,150 | \r) | \r\r | $ | \r(7,274 | \r) | \r\r | $ | \r(9,287 | \r) |
| Foreign | \r\r | \r | 2,034 | \r\r | \r | \r | 1,054 | \r\r | \r | \r | 2,293 | \r|
| Loss\r before income taxes | \r\r | $ | \r(6,116 | \r) | \r\r | $ | \r(6,220 | \r) | \r\r | $ | \r(6,994 | \r) |
The\rprovision (benefit) for income taxes for fiscal 2017, 2016, and 2015 consists of the following (in thousands):
\r\r\r\r
| \r | \r | Fiscal\r Year Ended | \r||||||||||
| \r | \r | May\r 27, 2017 | \r \r | \r | May\r 28, 2016 | \r \r | \r | May\r 30, 2015 | \r ||||
| Current: | \r\r | \r | \r | \r | \r | \r | \r | \r | ||||
| Federal | \r\r | $ | \r(117 | \r) | \r\r | $ | \r— | \r\r | \r | $ | \r(326 | \r) |
| State | \r\r | \r | 3 | \r\r | \r | \r | 17 | \r\r | \r | \r | 14 | \r|
| Foreign | \r\r | \r | 1,035 | \r\r | \r | \r | 441 | \r\r | \r | \r | 191 | \r|
| Total\r current | \r\r | $ | \r921 | \r\r | \r | $ | \r458 | \r\r | \r | $ | \r(121 | \r) |
| Deferred: | \r\r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | |
| Federal | \r\r | $ | \r— | \r\r | \r | $ | \r— | \r\r | \r | $ | \r(1,964 | \r) |
| State | \r\r | \r | — | \r\r | \r | \r | — | \r\r | \r | \r | 530 | \r|
| Foreign | \r\r | \r | (109 | \r) | \r\r | \r | 88 | \r\r | \r | \r | 89 | \r|
| Total\r deferred | \r\r | $ | \r(109 | \r) | \r\r | $ | \r88 | \r\r | \r | $ | \r(1,345 | \r) |
| Income\r tax provision (benefit) | \r\r | $ | \r812 | \r\r | \r | $ | \r546 | \r\r | \r | $ | \r(1,466 | \r) |
The\rdifferences between income taxes at the U.S. federal statutory income tax rate of 34% and the reported income tax provision (benefit)\rfor fiscal 2017, 2016, and 2015 are summarized as follows:
\r\r\r\r
| \r | \r | Fiscal\r Year Ended | \r||||||||||
| \r | \r | May\r 27, 2017 | \r \r | \r | May\r 28, 2016 | \r \r | \r | May\r 30, 2015 | \r ||||
| Federal\r statutory rate | \r\r | \r | 34 | \r% | \r\r | \r | 34 | \r% | \r\r | \r | 34 | \r% |
| Effect\r of: | \r\r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | |
| State\r income taxes, net of federal tax benefit | \r\r | \r | 4.8 | \r\r | \r | \r | 4.2 | \r\r | \r | \r | 5.3 | \r|
| Foreign\r income inclusion | \r\r | \r | (20.7 | \r) | \r\r | \r | (0.4 | \r) | \r\r | \r | (1.6 | \r) |
| Foreign\r taxes at other rates | \r\r | \r | 1.0 | \r\r | \r | \r | 0.6 | \r\r | \r | \r | 4.4 | \r|
| Permanent\r tax differences | \r\r | \r | (0.5 | \r) | \r\r | \r | (0.8 | \r) | \r\r | \r | (0.5 | \r) |
| Intercompany\r items | \r\r | \r | — | \r\r | \r | \r | — | \r\r | \r | \r | 2.2 | \r|
| Tax\r reserves | \r\r | \r | 0.9 | \r\r | \r | \r | (6.0 | \r) | \r\r | \r | 0.8 | \r|
| Additional\r U.S. tax on undistributed foreign earnings | \r\r | \r | 15.8 | \r\r | \r | \r | (32.7 | \r) | \r\r | \r | (0.5 | \r) |
| Net\r increase in valuation allowance for deferred tax assets | \r\r | \r | (46.6 | \r) | \r\r | \r | (11.4 | \r) | \r\r | \r | (27.3 | \r) |
| Return\r to provision adjustments | \r\r | \r | (2.0 | \r) | \r\r | \r | 3.9 | \r\r | \r | \r | 4.0 | \r|
| Other | \r\r | \r | — | \r\r | \r | \r | (0.2 | \r) | \r\r | \r | 0.1 | \r|
| Effective\r tax rate | \r\r | \r | (13.3 | \r)% | \r\r | \r | (8.8 | \r)% | \r\r | \r | 20.9 | \r% |
Our\rdeferred tax assets and liabilities reflect continuing operations as of May 27, 2017 and May 28, 2016. Significant components\rare as follows (in thousands):
\r\r\r\r
| \r | \r | Fiscal\r Year Ended | \r||||||
| \r | \r | May\r 27, 2017 | \r \r | \r | May\r 28, 2016 | \r |||
| Deferred\r tax assets: | \r\r | \r | \r | \r | \r | \r | \r | |
| NOL\r carryforwards - foreign and domestic | \r\r | $ | \r7,870 | \r\r | \r | $ | \r9,089 | \r|
| Inventory\r valuations | \r\r | \r | 1,141 | \r\r | \r | \r | 1,141 | \r|
| Goodwill | \r\r | \r | 325 | \r\r | \r | \r | 798 | \r|
| Foreign\r tax credits | \r\r | \r | 3,808 | \r\r | \r | \r | 304 | \r|
| Severance\r reserve | \r\r | \r | 227 | \r\r | \r | \r | 34 | \r|
| Foreign\r capital loss | \r\r | \r | 1,142 | \r\r | \r | \r | 1,079 | \r|
| Other | \r\r | \r | 2,048 | \r\r | \r | \r | 2,167 | \r|
| Subtotal | \r\r | $ | \r16,561 | \r\r | \r | $ | \r14,612 | \r|
| Valuation\r allowance - foreign and domestic | \r\r | \r | (8,557 | \r) | \r\r | \r | (5,871 | \r) |
| Net\r deferred tax assets after valuation allowance | \r\r | $ | \r8,004 | \r\r | \r | $ | \r8,741 | \r|
| Deferred\r tax liabilities: | \r\r | \r | \r | \r | \r | \r | \r | |
| Accelerated\r depreciation | \r\r | $ | \r(1,356 | \r) | \r\r | $ | \r(973 | \r) |
| Tax\r on undistributed foreign earnings | \r\r | \r | (5,738 | \r) | \r\r | \r | (6,702 | \r) |
| Other | \r\r | \r | 35 | \r\r | \r | \r | (175 | \r) |
| Subtotal | \r\r | $ | \r(7,059 | \r) | \r\r | $ | \r(7,850 | \r) |
| Net\r deferred tax assets | \r\r | $ | \r945 | \r\r | \r | $ | \r891 | \r|
| Supplemental\r disclosure of deferred tax assets : | \r\r | \r | \r | \r | \r | \r | \r | |
| Domestic | \r\r | $ | \r6,937 | \r\r | \r | $ | \r4,190 | \r|
| Foreign | \r\r | $ | \r2,565 | \r\r | \r | $ | \r2,549 | \r|
| Total | \r\r | $ | \r9,502 | \r\r | \r | $ | \r6,739 | \r
The\rfollowing table summarizes the activity related to the unrecognized tax benefits (in thousands):
\r\r\r\r
| \r | \r | Fiscal\r Year Ended | \r||||||
| \r | \r | May\r 27, 2017 | \r \r | \r | May\r 28, 2016 | \r |||
| Unrecognized\r tax benefits, beginning of period | \r\r | $ | \r2,000 | \r\r | \r | $ | \r2,000 | \r|
| Increase\r in positions taken in prior period | \r\r | \r | 75 | \r\r | \r | \r | 299 | \r|
| Decrease\r in positions due to settlements | \r\r | \r | (75 | \r) | \r\r | \r | — | \r|
| Decrease\r related to the expiration of statute of limitations | \r\r | \r | (117 | \r) | \r\r | \r | (299 | \r) |
| Unrecognized\r tax benefits, end of period | \r\r | $ | \r1,883 | \r\r | \r | $ | \r2,000 | \r
\r\r
Unrecognized\rtax benefits for continuing and discontinued operations are as follows (in thousands):
\r\r\r\r
| \r | \r | Fiscal\r Year Ended | \r||||||
| \r | \r | May\r 27, 2017 | \r \r | \r | May\r 28, 2016 | \r |||
| Continuing\r operations | \r\r | $ | \r— | \r\r | \r | $ | \r117 | \r|
| Discontinued\r operations (1) | \r\r | \r | 1,883 | \r\r | \r | \r | 1,883 | \r|
| \r | \r | $ | \r1,883 | \r\r | \r | $ | \r2,000 | \r
\r\r
| (1) | \rRelates to an amended Illinois state income\r tax return related to the sale of RFPD. |
Operating\rresults by segment are summarized in the following table (in thousands):
\r\r\r\r
| \r | \r | Fiscal\r Year Ended | \r||||||||||
| \r | \r | May\r 27, 2017 | \r \r | \r | May\r 28, 2016 | \r \r | \r | May\r 30, 2015 | \r ||||
| PMT | \r\r | \r | \r | \r | \r | \r | \r | \r | ||||
| Net Sales | \r\r | $ | \r104,226 | \r\r | \r | $ | \r105,554 | \r\r | \r | $ | \r105,748 | \r|
| Gross Profit | \r\r | \r | 33,382 | \r\r | \r | \r | 33,088 | \r\r | \r | \r | 33,098 | \r|
| Canvys | \r\r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | |
| Net Sales | \r\r | $ | \r20,534 | \r\r | \r | $ | \r23,453 | \r\r | \r | $ | \r24,645 | \r|
| Gross Profit | \r\r | \r | 5,752 | \r\r | \r | \r | 6,017 | \r\r | \r | \r | 6,457 | \r|
| Healthcare | \r\r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | |
| Net Sales | \r\r | $ | \r12,112 | \r\r | \r | $ | \r13,009 | \r\r | \r | $ | \r6,564 | \r|
| Gross Profit | \r\r | \r | 4,749 | \r\r | \r | \r | 5,730 | \r\r | \r | \r | 1,583 | \r
A\rreconciliation of assets to the relevant consolidated amount is as follows (in thousands):
\r\r\r\r
| \r | \r | May\r 27, 2017 | \r \r | \r | May\r 28, 2016 | \r |||
| Segment\r assets | \r\r | $ | \r80,105 | \r\r | \r | $ | \r84,863 | \r|
| Cash\r and cash equivalents | \r\r | \r | 55,327 | \r\r | \r | \r | 60,454 | \r|
| Investments\r - current | \r\r | \r | 6,429 | \r\r | \r | \r | 2,268 | \r|
| Other\r current assets (1) | \r\r | \r | 3,330 | \r\r | \r | \r | 3,143 | \r|
| Net\r property, plant and equipment | \r\r | \r | 8,752 | \r\r | \r | \r | 8,333 | \r|
| Investments\r - non-current | \r\r | \r | 2,419 | \r\r | \r | \r | 7,799 | \r|
| Other\r assets - non-current deferred income taxes | \r\r | \r | 1,102 | \r\r | \r | \r | 1,270 | \r|
| Total\r assets | \r\r | $ | \r157,464 | \r\r | \r | $ | \r168,130 | \r
\r\r
| (1) | \rOther current\r assets include miscellaneous receivables, prepaid expenses, and current deferred income taxes. |
Net\rsales and gross profit by geographic region are summarized in the following table (in thousands):
\r\r\r\r
| \r | \r | Fiscal\r Year Ended | \r||||||||||
| \r | \r | May\r 27, 2017 | \r \r | \r | May\r 28, 2016 | \r \r | \r | May\r 30, 2015 | \r ||||
| Net\r Sales | \r\r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | |
| North America | \r\r | $ | \r55,963 | \r\r | \r | $ | \r66,365 | \r\r | \r | $ | \r59,742 | \r|
| Asia/Pacific | \r\r | \r | 27,997 | \r\r | \r | \r | 24,564 | \r\r | \r | \r | 24,605 | \r|
| Europe | \r\r | \r | 44,296 | \r\r | \r | \r | 44,634 | \r\r | \r | \r | 44,425 | \r|
| Latin America | \r\r | \r | 8,552 | \r\r | \r | \r | 6,347 | \r\r | \r | \r | 8,275 | \r|
| Other (1) | \r\r | \r | 64 | \r\r | \r | \r | 106 | \r\r | \r | \r | (90 | \r) |
| Total | \r\r | $ | \r136,872 | \r\r | \r | $ | \r142,016 | \r\r | \r | $ | \r136,957 | \r|
| Gross\r Profit | \r\r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | |
| North America | \r\r | $ | \r20,597 | \r\r | \r | $ | \r23,506 | \r\r | \r | $ | \r20,352 | \r|
| Asia/Pacific | \r\r | \r | 9,630 | \r\r | \r | \r | 8,212 | \r\r | \r | \r | 7,967 | \r|
| Europe | \r\r | \r | 14,418 | \r\r | \r | \r | 13,541 | \r\r | \r | \r | 14,051 | \r|
| Latin America | \r\r | \r | 3,250 | \r\r | \r | \r | 2,397 | \r\r | \r | \r | 3,082 | \r|
| Other (1) | \r\r | \r | (4,012 | \r) | \r\r | \r | (2,821 | \r) | \r\r | \r | (4,314 | \r) |
| Total | \r\r | $ | \r43,883 | \r\r | \r | $ | \r44,835 | \r\r | \r | $ | \r41,138 | \r
\r\r
| \r | (1) | \rOther primarily includes net sales not allocated\r to a specific geographical region, unabsorbed value-add costs, and other unallocated expenses. |
Net\rassets by geographic region are summarized in the following table (in thousands):
\r\r\r\r
| \r | \r | Fiscal\r Year Ended | \r||||||||||
| \r | \r | May\r 27, 2017 | \r \r | \r | May\r 28, 2016 | \r \r | \r | May\r 30, 2015 | \r ||||
| Net\r Assets | \r\r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | |
| North America | \r\r | $ | \r62,085 | \r\r | \r | $ | \r65,832 | \r\r | \r | $ | \r76,153 | \r|
| Asia/Pacific | \r\r | \r | 34,990 | \r\r | \r | \r | 42,547 | \r\r | \r | \r | 44,602 | \r|
| Europe | \r\r | \r | 32,794 | \r\r | \r | \r | 31,495 | \r\r | \r | \r | 34,127 | \r|
| Latin\r America | \r\r | \r | 2,458 | \r\r | \r | \r | 1,801 | \r\r | \r | \r | 1,770 | \r|
| Total | \r\r | $ | \r132,327 | \r\r | \r | $ | \r141,675 | \r\r | \r | $ | \r156,652 | \r
Investments\rmeasured at fair value on a recurring basis subject to the disclosure requirements of ASC 820 as of May 27, 2017 and May 28,\r2016, were as follows (in thousands):
\r\r\r\r
| \r | \r | Level 1 | \r\r | \r | Level 2 | \r\r | \r | Level 3 | \r||||
| May 27, 2017 | \r\r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | |
| Time deposits/CDs | \r\r | $ | \r8,226 | \r\r | \r | $ | \r— | \r\r | \r | $ | \r— | \r|
| Equity\r securities | \r\r | \r | 622 | \r\r | \r | \r | — | \r\r | \r | \r | — | \r|
| Total | \r\r | $ | \r8,848 | \r\r | \r | $ | \r— | \r\r | \r | $ | \r— | \r|
| May 28, 2016 | \r\r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | |
| Time deposits/CDs | \r\r | $ | \r9,517 | \r\r | \r | $ | \r— | \r\r | \r | $ | \r— | \r|
| Equity\r securities | \r\r | \r | 550 | \r\r | \r | \r | — | \r\r | \r | \r | — | \r|
| Total | \r\r | $ | \r10,067 | \r\r | \r | $ | \r— | \r\r | \r | $ | \r— | \r
The\rfollowing table presents the valuation and qualifying account activity for fiscal year ended May 27, 2017, May 28, 2016,\rand May 30, 2015, (in thousands):
\r\r\r\r
| Description | \r\r | Balance at beginning\r of period | \r \r | Charged to expense | \r \r | Deductions | \r\r | Balance at end\r of period | ||||||||||
| Year\r ended May 27, 2017 | \r\r | \r | \r | \r | \r | \r | \r | |||||||||||
| Allowance\r for doubtful accounts | \r\r | $ | \r364 | \r\r | \r | $ | \r226 | \r\r | (1) | \r\r | $ | \r(192 | \r) | \r(2) | \r\r | $ | \r398 | \r|
| Inventory\r provisions | \r\r | \r | 3,380 | \r\r | \r | \r | 456 | \r\r | (3) | \r\r | \r | 380 | \r\r | (4) | \r\r | \r | 3,456 | \r|
| Year\r ended May 28, 2016 | \r\r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | |
| Allowance\r for doubtful accounts | \r\r | $ | \r283 | \r\r | \r | $ | \r228 | \r\r | (1) | \r\r | $ | \r(147 | \r) | \r(2) | \r\r | $ | \r364 | \r|
| Inventory\r provisions | \r\r | \r | 2,991 | \r\r | \r | \r | 690 | \r\r | (3) | \r\r | \r | 301 | \r\r | (4) | \r\r | \r | 3,380 | \r|
| Year\r ended May 30, 2015 | \r\r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | |
| Allowance\r for doubtful accounts | \r\r | $ | \r581 | \r\r | \r | $ | \r(221 | \r) | \r(1) | \r\r | $ | \r77 | \r\r | (2) | \r\r | $ | \r283 | \r|
| Inventory\r provisions | \r\r | \r | 3,141 | \r\r | \r | \r | 228 | \r\r | (3) | \r\r | \r | 378 | \r\r | (4) | \r\r | \r | 2,991 | \r
\r\r
Notes:
\r\r\r\r
| (1) | \rCharges to bad debt expense, net of bad debt\r recoveries. |
| (2) | \rUncollectible amounts written off, net of\r recoveries and foreign currency translation. |
| (3) | \rCharges to cost of sales. Included in fiscal\r 2017 are inventory write-downs of $0.4 million for PMT and $0.1 million for Canvys, and less than $0.1 million for Healthcare. |
| (4) | \rInventory disposed of or sold, net of foreign\r currency translation. |
| Description | \r\r | First Quarter | \r \r | \r | Second Quarter | \r \r | \r | Third Quarter | \r \r | \r | Fourth Quarter | \r |||||
| Fiscal\r 2017 | \r\r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | |
| Net\r sales | \r\r | $ | \r33,373 | \r\r | \r | $ | \r33,827 | \r\r | \r | $ | \r32,313 | \r\r | \r | $ | \r37,359 | \r|
| Gross\r profit | \r\r | \r | 10,240 | \r\r | \r | \r | 10,964 | \r\r | \r | \r | 10,692 | \r\r | \r | \r | 11,987 | \r|
| Loss\r from continuing operations | \r\r | \r | (2,850 | \r) | \r\r | \r | (2,522 | \r) | \r\r | \r | (1,431 | \r) | \r\r | \r | (125 | \r) |
| Net\r loss | \r\r | \r | (2,850 | \r) | \r\r | \r | (2,522 | \r) | \r\r | \r | (1,431 | \r) | \r\r | \r | (125 | \r) |
| Loss\r from continuing operations | \r\r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | |
| Common\r stock - basic | \r\r | $ | \r(0.23 | \r) | \r\r | $ | \r(0.20 | \r) | \r\r | $ | \r(0.11 | \r) | \r\r | $ | \r(0.01 | \r) |
| Class\r B common stock - basic | \r\r | $ | \r(0.20 | \r) | \r\r | $ | \r(0.18 | \r) | \r\r | $ | \r(0.10 | \r) | \r\r | $ | \r(0.01 | \r) |
| Common\r stock - diluted | \r\r | $ | \r(0.23 | \r) | \r\r | $ | \r(0.20 | \r) | \r\r | $ | \r(0.11 | \r) | \r\r | $ | \r(0.01 | \r) |
| Class\r B common stock - diluted | \r\r | $ | \r(0.20 | \r) | \r\r | $ | \r(0.18 | \r) | \r\r | $ | \r(0.10 | \r) | \r\r | $ | \r(0.01 | \r) |
| Net\r loss | \r\r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | |
| Common\r stock - basic | \r\r | $ | \r(0.23 | \r) | \r\r | $ | \r(0.20 | \r) | \r\r | $ | \r(0.11 | \r) | \r\r | $ | \r(0.01 | \r) |
| Class\r B common stock - basic | \r\r | $ | \r(0.20 | \r) | \r\r | $ | \r(0.18 | \r) | \r\r | $ | \r(0.10 | \r) | \r\r | $ | \r(0.01 | \r) |
| Common\r stock - diluted | \r\r | $ | \r(0.23 | \r) | \r\r | $ | \r(0.20 | \r) | \r\r | $ | \r(0.11 | \r) | \r\r | $ | \r(0.01 | \r) |
| Class\r B common stock - diluted | \r\r | $ | \r(0.20 | \r) | \r\r | $ | \r(0.18 | \r) | \r\r | $ | \r(0.10 | \r) | \r\r | $ | \r(0.01 | \r) |
| Fiscal\r 2016 | \r\r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | |
| Net\r sales | \r\r | $ | \r37,071 | \r\r | \r | $ | \r34,086 | \r\r | \r | $ | \r31,291 | \r\r | \r | $ | \r39,568 | \r|
| Gross\r profit | \r\r | \r | 11,262 | \r\r | \r | \r | 10,435 | \r\r | \r | \r | 9,750 | \r\r | \r | \r | 13,388 | \r|
| Loss\r from continuing operations | \r\r | \r | (1,399 | \r) | \r\r | \r | (2,286 | \r) | \r\r | \r | (2,926 | \r) | \r\r | \r | (155 | \r) |
| Net\r loss | \r\r | \r | (1,399 | \r) | \r\r | \r | (2,286 | \r) | \r\r | \r | (2,926 | \r) | \r\r | \r | (155 | \r) |
| Loss\r from continuing operations | \r\r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | |
| Common\r stock - basic | \r\r | $ | \r(0.10 | \r) | \r\r | $ | \r(0.18 | \r) | \r\r | $ | \r(0.23 | \r) | \r\r | $ | \r(0.01 | \r) |
| Class\r B common stock - basic | \r\r | $ | \r(0.10 | \r) | \r\r | $ | \r(0.16 | \r) | \r\r | $ | \r(0.21 | \r) | \r\r | $ | \r(0.01 | \r) |
| Common\r stock - diluted | \r\r | $ | \r(0.10 | \r) | \r\r | $ | \r(0.18 | \r) | \r\r | $ | \r(0.23 | \r) | \r\r | $ | \r(0.01 | \r) |
| Class\r B common stock - diluted | \r\r | $ | \r(0.10 | \r) | \r\r | $ | \r(0.16 | \r) | \r\r | $ | \r(0.21 | \r) | \r\r | $ | \r(0.01 | \r) |
| Net\r loss | \r\r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | |
| Common\r stock - basic | \r\r | $ | \r(0.10 | \r) | \r\r | $ | \r(0.18 | \r) | \r\r | $ | \r(0.23 | \r) | \r\r | $ | \r(0.01 | \r) |
| Class\r B common stock - basic | \r\r | $ | \r(0.10 | \r) | \r\r | $ | \r(0.16 | \r) | \r\r | $ | \r(0.21 | \r) | \r\r | $ | \r(0.01 | \r) |
| Common\r stock - diluted | \r\r | $ | \r(0.10 | \r) | \r\r | $ | \r(0.18 | \r) | \r\r | $ | \r(0.23 | \r) | \r\r | $ | \r(0.01 | \r) |
| Class\r B common stock - diluted | \r\r | $ | \r(0.10 | \r) | \r\r | $ | \r(0.16 | \r) | \r\r | $ | \r(0.21 | \r) | \r\r | $ | \r(0.01 | \r) |
New Accounting Pronouncements
\r\r
In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2014-09 (“ASU 2014-09”), Revenue from Contracts with Customers, which amends guidance for revenue recognition. ASU 2014-09 is principles based guidance that can be applied to all contracts with customers, enhancing comparability of revenue recognition practices across entities, industries, jurisdictions and capital markets. The core principle of the guidance is that entities should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods and services. The guidance details the steps entities should apply to achieve the core principle. In August 2015, the FASB issued an amendment to defer the effective date for all entities by one year. For public entities, ASU 2014-09 is effective for annual reporting periods beginning after December 15, 2017, including interim periods within that reporting period. Early adoption is permitted as of annual reporting periods beginning after December 15, 2016. Companies have the option of using either a full or modified retrospective approach in applying this standard. During fiscal 2016 and 2017, the FASB issued four additional updates which further clarify the guidance provided in ASU 2014-09.
\r\r
We are evaluating the impact of the new standard on our financial statements using a three-phase approach (assessment, conversion and implementation). We are in our primary assessment stage, which included identifying revenue streams, contracts and responsible parties who create and manage those accounts, quantifying the impact of identified contracts on the financial statements and identifying internal control changes. We are in the initial stage of our assessment phase and therefore further evaluation is needed to determine the impact on our financial statements, related disclosures and controls upon adoption. We expect to finalize the primary assessment phase in the first quarter of fiscal 2018. We will complete the conversion and implementation phases during fiscal 2018 in conjunction with future interpretative guidance.
\r\r
In July 2015, the FASB issued ASU No. 2015-11 (“ASU 2015-11”), Simplifying the Measurement of Inventory. ASU 2015-11 requires inventory within the scope of the ASU (e.g., first-in, first-out (“FIFO”) or average cost) to be measured using the lower of cost and net realizable value. Inventory excluded from the scope of the ASU (i.e., last-in, first-out (“LIFO”) or the retail inventory method) will continue to be measured at the lower of cost or market. The ASU also amends some of the other guidance in Topic 330, “Inventory,” to more clearly articulate the requirements for the measurement and disclosure of inventory. However, those amendments are not intended to result in any changes to current practice. ASU 2015-11 is effective for annual periods beginning after December 15, 2016, and interim periods within those annual periods. The Company does not expect adoption of ASU 2015-11 to have a material impact on the Company’s consolidated financial statements.
\r\r
In November 2015, the FASB issued ASU No. 2015-17, Income Taxes (Topic 740): Balance Sheet Classification of Deferred Taxes. ASU 2015-17 eliminates the prior US GAAP guidance in Topic 740, Income Taxes, that required an entity to separate deferred tax liabilities and assets between current and noncurrent amounts in a classified balance sheet. The amendments in ASU 2015-17 require that all deferred tax liabilities and assets of the same tax jurisdiction or a tax filing group, as well as any related valuation allowance, be offset and presented as a single noncurrent amount in a classified balance sheet. ASU 2015-17 is effective for annual periods beginning after December 15, 2016, and interim periods within those annual periods. In order to simplify presentation of deferred tax balances, the Company adopted this standard prospectively in the quarter ended August 27, 2016, which did not have a material impact on the Company’s results of operations, cash flows or stockholders’ equity. Periods prior to August 27, 2016 were not retrospectively adjusted.
\r\r
In February 2016, the FASB issued ASU\r2016-02 (“ASU 2016-02”), Leases. ASU 2016-02 establishes a right-of-use (“ROU”) model that requires\ra lessee to record an ROU asset and a lease liability on the balance sheet for all leases with terms longer than 12 months. Leases\rwill be classified as either finance or operating, with classification affecting the pattern of expense recognition in the income\rstatement. ASU 2016-02 is effective for fiscal years beginning after December 15, 2018, including interim periods within those\rfiscal years. A modified retrospective transition approach is required for lessees for capital and operating leases existing at,\ror entered into after, the beginning of the earliest comparative period presented in the financial statements, with certain practical\rexpedients available. The Company is currently evaluating the potential impact of the adoption of ASU 2016-02 on the Company’s\rconsolidated financial statements. Upon adoption, the Company expects that the amounts recognized for the ROU asset and lease\rliability in the balance sheets may be material.
\r \r\r
In March 2016, the FASB issued ASU 2016-09 (“ASU 2016-09”), Compensation - Stock Compensation: Improvements to Employee Share-Based Payment Accounting. ASU 2016-09 introduces targeted amendments intended to simplify the accounting for stock compensation. ASU 2016-09 will directly impact the tax administration of equity plans. ASU 2016-09 is effective for annual periods beginning after December 15, 2016, and interim periods within those annual periods. Early adoption is permitted and any adjustments should be reflected as of the beginning of the fiscal year that includes that interim period. The Company expects to adopt ASU 2016-09 in the first quarter of fiscal 2018, at which time we will evaluate the potential impact of the adoption of this standard on the Company’s consolidated financial statements.
\r\r
In August 2016, the FASB issued ASU No. 2016-15 (“ASU 2016-15”), Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments. ASU 2016-15 will make eight targeted changes to how cash receipts and cash payments are presented and classified in the statement of cash flows. ASU 2016-15 is effective for fiscal years beginning after December 15, 2017. The new standard will require adoption on a retrospective basis unless it is impracticable to apply, in which case it would be required to apply the amendments prospectively as of the earliest date practicable. The Company is currently in the process of evaluating the impact of adoption on its consolidated financial statements.
\r\r
In January 2017, the FASB issued ASU No. 2017-04 (“ASU 2017-04”), Simplifying the Test for Goodwill Impairment. ASU 2017-04 eliminates step 2 from the goodwill impairment test. As amended, the goodwill impairment test will consist of one step comparing the fair value of a reporting unit with its carrying amount. An entity should recognize a goodwill impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value. An entity may still perform the optional qualitative assessment for a reporting unit to determine if it is more likely than not that goodwill is impaired. ASU 2017-04 will be effective for fiscal years and interim periods beginning after December 15, 2019. ASU 2017-04 is required to be applied prospectively and early adoption is permitted for interim or annual goodwill impairment tests performed on testing dates after January 1, 2017. The Company is currently in the process of evaluating the impact of adoption on its consolidated financial statements.
"}]},{"name":"rpt:f-1144","factDimensions":{"xbrl:concept":"us-gaap:ScheduleOfProductWarrantyLiabilityTableTextBlock","xbrl:period":"2016-05-29T00:00:00/2017-05-28T00:00:00","xbrl:entity":"cik:0000355948"},"factValues":[{"value":"Changes\rin the warranty reserve during fiscal 2017 and 2016 were as follows (in thousands):
\r\r\r\r
| \r | \r | Warranty\r Reserve | \r||
| Balance\r at May 30, 2015 | \r\r | $ | \r188 | \r|
| Accruals\r for products sold | \r\r | \r | 108 | \r|
| Utilization | \r\r | \r | (86 | \r) |
| Balance\r at May 28, 2016 | \r\r | $ | \r210 | \r|
| Accruals\r for products sold | \r\r | \r | 89 | \r|
| Utilization | \r\r | \r | (78 | \r) |
| Recovery | \r\r | \r | (115 | \r) |
| Balance\r at May 27, 2017 | \r\r | $ | \r106 | \r
"}]},{"name":"rpt:f-1145","factDimensions":{"xbrl:concept":"us-gaap:StandardProductWarrantyPolicy","xbrl:period":"2016-05-29T00:00:00/2017-05-28T00:00:00","xbrl:entity":"cik:0000355948"},"factValues":[{"value":"
Warranties:\rWe offer warranties for the limited number of specific products we manufacture. We also provide extended warranties for some\rproducts we sell that lengthen the period of coverage specified in the manufacturer’s original warranty. Our warranty terms\rgenerally range from one to three years.
\r\r\r\r
We\restimate the cost to perform under the warranty obligation and recognize this estimated cost at the time of the related product\rsale. We record expense related to our warranty obligations as cost of sales in our consolidated statements of comprehensive loss.\rEach quarter, we assess actual warranty costs incurred on a product-by-product basis and compare the warranty costs to our estimated\rwarranty obligation. With respect to new products, estimates are based generally on knowledge of the products, the extended warranty\rperiod, and warranty experience.
\r\r\r\r
Warranty\rreserves are established for costs that are expected to be incurred after the sale and delivery of products under warranty. Warranty\rreserves are included in accrued liabilities on our consolidated balance sheets. The warranty reserves are determined based on\rknown product failures, historical experience, and other available evidence.
\r\r\r\r
Changes\rin the warranty reserve during fiscal 2017 and 2016 were as follows (in thousands):
\r\r\r\r
| \r | \r | Warranty\r Reserve | \r||
| Balance\r at May 30, 2015 | \r\r | $ | \r188 | \r|
| Accruals\r for products sold | \r\r | \r | 108 | \r|
| Utilization | \r\r | \r | (86 | \r) |
| Balance\r at May 28, 2016 | \r\r | $ | \r210 | \r|
| Accruals\r for products sold | \r\r | \r | 89 | \r|
| Utilization | \r\r | \r | (78 | \r) |
| Recovery | \r\r | \r | (115 | \r) |
| Balance\r at May 27, 2017 | \r\r | $ | \r106 | \r
"}]},{"name":"rpt:f-1146","factDimensions":{"xbrl:concept":"rell:ProductWarrantyAccrualRecovery","xbrl:period":"2016-05-29T00:00:00/2017-05-28T00:00:00","xbrl:entity":"cik:0000355948","xbrl:unit":"iso4217:USD"},"factValues":[{"value":"-115000","decimals":-3}]},{"name":"rpt:f-1147","factDimensions":{"xbrl:concept":"us-gaap:InventoryPolicyTextBlock","xbrl:period":"2016-05-29T00:00:00/2017-05-28T00:00:00","xbrl:entity":"cik:0000355948"},"factValues":[{"value":"
Inventories,\rnet: Our worldwide inventories are stated at the lower of cost or market, generally using a weighted-average cost method.\rOur net inventories include approximately $36.0 million of finished goods, $5.3 million of raw materials, and $1.4 million of\rwork-in-progress as of May 27, 2017, as compared to approximately $40.0 million of finished goods, $4.4 million of raw materials,\rand $1.0 million of work-in-progress as of May 28, 2016. The inventory reserve as of May 27, 2017, was $3.5 million compared to\r$3.4 million as of May 28, 2016.
\r\r\r\r
Provisions\rfor obsolete or slow moving inventories are recorded based upon regular analysis of stock rotation privileges, obsolescence, the\rexiting of certain markets, and assumptions about future demand and market conditions. If future demand, changes in the industry,\ror market conditions differ from management’s estimates, additional provisions may be necessary.
\r\r\r\r
We\rrecorded provisions to our inventory reserves of $0.5 million, $0.7 million, and $0.2 million during fiscal 2017, 2016, and 2015,\rrespectively, which were included in cost of sales. The provisions were principally for obsolete and\rslow moving parts. The parts were written down to estimated realizable value.
\r\r"}]},{"name":"rpt:f-1148","factDimensions":{"xbrl:concept":"us-gaap:StockRepurchasedDuringPeriodShares","xbrl:period":"2014-10-15T00:00:00/2014-10-17T00:00:00","xbrl:entity":"cik:0000355948","xbrl:unit":"xbrla:shares","us-gaap:RelatedPartyTransactionsByRelatedPartyAxis":"us-gaap:AffiliatedEntityMember","us-gaap:StatementClassOfStockAxis":"us-gaap:CommonClassBMember"},"factValues":[{"value":"50000"}]},{"name":"rpt:f-1149","factDimensions":{"xbrl:concept":"us-gaap:SharePrice","xbrl:period":"2014-10-17T00:00:00","xbrl:entity":"cik:0000355948","xbrl:unit":"iso4217:USD/xbrla:shares","us-gaap:RelatedPartyTransactionsByRelatedPartyAxis":"us-gaap:AffiliatedEntityMember","us-gaap:StatementClassOfStockAxis":"us-gaap:CommonClassBMember"},"factValues":[{"value":"9.91"}]}]}}