RICHARDSON ELECTRONICS, LTD. Commitments Disclosure
The Company leases real and personal property in the normal course of business under various operating and financing leases. The Company uses operating leases for facility space and automobiles. Most of the leased facility space is for sales and general office use. Automobile leases are used throughout the Company. Financing leases were used for computer servers.
Several leases include renewal clauses which vary in length and may not include specific rent renewal amounts. The Company will revise the value of the right of use assets and associated lease liabilities when the Company determines it is reasonably certain of renewal.
The gross amounts of assets and liabilities related to both operating and financing leases at May 27, 2023 and May 28, 2022 were as follows (in thousands):
Lease Type |
|
May 27, 2023 |
|
|
May 28, 2022 |
|
||
|
$ |
2,457 |
|
|
$ |
3,024 |
|
|
|
|
— |
|
|
|
215 |
|
|
Total Lease ROU asset |
|
$ |
2,457 |
|
|
$ |
3,239 |
|
|
|
|
|
|
|
|
||
|
$ |
1,028 |
|
|
$ |
1,109 |
|
|
|
|
— |
|
|
|
— |
|
|
Total lease liability current |
|
$ |
1,028 |
|
|
$ |
1,109 |
|
|
|
|
|
|
|
|
||
|
$ |
1,429 |
|
|
$ |
1,915 |
|
|
|
|
— |
|
|
|
— |
|
|
Total lease liability non-current |
|
$ |
1,429 |
|
|
$ |
1,915 |
|
The components of lease costs for fiscal 2023 and fiscal 2022 were as follows (in thousands):
Lease Type |
|
Classification |
|
Fiscal Year Ended |
|
|
Fiscal Year Ended |
|
||
Consolidated operating lease expense |
|
Operating expenses |
|
$ |
1,721 |
|
|
$ |
1,781 |
|
|
|
|
|
|
|
|
|
|
||
Consolidated financing lease amortization |
|
Operating expenses |
|
|
— |
|
|
|
92 |
|
Consolidated financing lease interest |
|
Interest expense |
|
|
— |
|
|
|
3 |
|
Consolidated financing lease expense |
|
|
|
|
— |
|
|
|
95 |
|
|
|
|
|
|
|
|
|
|
||
Net lease cost |
|
|
|
$ |
1,721 |
|
|
$ |
1,876 |
|
Rent expense for fiscal 2023, fiscal 2022 and fiscal 2021 was $1.5 million, $1.6 million, and $1.7 million, respectively.
Our future lease commitments for minimum rentals, including common area maintenance charges and property taxes during the next five years are as follows (in thousands):
Fiscal Year |
|
Operating Leases |
|
|
2024 |
|
$ |
1,147 |
|
2025 |
|
|
827 |
|
2026 |
|
|
453 |
|
2027 |
|
|
113 |
|
2028 |
|
|
23 |
|
Thereafter |
|
|
12 |
|
Total lease payments |
|
|
2,575 |
|
Lease inputted interest |
|
|
118 |
|
Net minimum lease payments |
|
$ |
2,457 |
|
The weighted average remaining lease terms and interest rates of leases held by the Company as of May 27, 2023 were as follows:
Lease Type |
|
Weighted Average Remaining |
|
Weighted Average |
Operating leases |
|
2.6 |
|
4.0% |
|
|
|
|
|
The cash outflows of the leasing activity of the Company as lessee for fiscal 2023 and fiscal 2022 were as follows (in thousands):
|
|
|
|
Fiscal Year Ended |
|
|||||
Cash Flow Source |
|
Classification |
|
May 27, 2023 |
|
|
May 28, 2022 |
|
||
Operating cash flows from operating leases |
|
Operating activities |
|
$ |
566 |
|
|
$ |
747 |
|
Operating cash flows from financing leases |
|
Operating activities |
|
|
— |
|
|
|
148 |
|
Finance cash flows from financing leases |
|
Financing activities |
|
|
— |
|
|
|
151 |
|
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2023 | Jul 31, 2023 | Showing above |
| 2022 | Aug 1, 2022 | |
| 2021 | Aug 2, 2021 | |
| 2020 | Aug 3, 2020 | |
| 2019 | Aug 5, 2019 | |
| 2018 | Aug 2, 2018 | |
| 2017 | Jul 31, 2017 | |
| 2016 | Jul 29, 2016 | |
About Commitments Disclosures
Commitments and contingencies disclosures catalog a company's off-balance-sheet obligations and legal exposures — purchase commitments, guarantee arrangements, pending litigation, and regulatory proceedings. These items represent potential future cash outflows that may not appear as liabilities on the balance sheet until they become probable and estimable.
Key signals: litigation reserves and disclosed loss ranges quantify management's estimate of legal exposure, but unquantified "reasonably possible" losses often represent the larger risk. Watch for changes in language around pending cases — shifts from "remote" to "reasonably possible" or increases in estimated loss ranges signal deteriorating outcomes. Unconditional purchase obligations and take-or-pay contracts create fixed cost structures that reduce operational flexibility. Guarantee arrangements for subsidiaries or joint ventures can create cascading obligations. Compare the total commitment schedule against projected free cash flow to assess whether the company can meet its obligations without additional financing.