Company Overview - Richardson Electronics, Ltd. is a global provider of engineered solutions for renewable energy and power management applications, with a focus on innovation and customer-centric solutions [5][8]. - The company manufactures over 50% of its products in LaFox, Illinois, Marlborough, Massachusetts, and Donaueschingen, Germany, adhering to strict specifications and supplier codes of conduct [5]. New Product Launch - Richardson Electronics announced the launch of two new monitoring relays, the TurbineGuard™ Temperature Signal Relay and the TurbineGuard™ Voltage Signal Relay, aimed at the wind and renewables markets [1][3]. - These products are designed to enhance safety and performance in turbine monitoring systems, addressing the needs of aging turbine fleets and regulatory compliance [1][3]. Product Features - The TurbineGuard™ Temperature Signal Relay includes features such as a temperature LCD readout, programmable temperature set points, and compatibility with both ultracapacitor and lead-acid battery technologies [6]. - The TurbineGuard™ Voltage Signal Relay offers a voltage LCD readout, programmable voltage set points, and status LEDs, ensuring user-friendly operation [6]. Strategic Focus - The company emphasizes its commitment to creating engineered solutions that deliver real value to users, reflecting a customer-first approach in product design and development [3]. - Richardson Electronics aims to meet the evolving needs of the renewable power generation market through continuous innovation and quality improvements [3].

Core Viewpoint - Richardson Electronics, Ltd. has expanded its customer base through a supply agreement with TransAlta Corporation for its patented pitch energy modules designed for GE wind turbines and SSB platforms, enhancing the efficiency and reliability of wind energy operations [1][2]. Group 1: Agreement and Product Details - The supply agreement will see Richardson Electronics provide its ULTRA3000® and ULTRAPEM™ modules to various wind farms in Canada and the United States, with shipments expected throughout 2025 [2]. - The pitch energy modules are ultracapacitor-based and are intended to replace lead acid batteries in wind turbine platforms that utilize electric pitch systems, thereby improving energy management for blade angle adjustments [3]. Group 2: Customer Feedback and Impact - TransAlta Corporation highlighted the significant operational improvements achieved through the use of Richardson's ultracapacitor technology, noting that pitch faults due to weak batteries were a leading cause of downtime and lost production [4]. - The successful trial of the Ultra-caps over a year led to positive feedback, with expectations that the technology will reduce maintenance needs and increase revenue by minimizing production losses [4]. Group 3: Company Overview - Richardson Electronics is a global manufacturer specializing in engineered solutions, green energy products, and power management applications, with over 50% of its products manufactured in the U.S. and Germany [6][9]. - The company serves a diverse range of markets, including alternative energy, healthcare, and military, and focuses on providing specialized technical expertise and engineered solutions [7][9].

Core Viewpoint - Richardson Electronics, Ltd. has expanded its customer base through a supply agreement with TransAlta Corporation to provide patented pitch energy modules for wind turbines, enhancing operational efficiency and reducing downtime [1][2][4]. Group 1: Agreement and Product Details - The agreement entails Richardson Electronics supplying its ULTRA3000 and ULTRAPEM™ modules to various wind farms in Canada and the United States, with shipments expected throughout 2025 [2]. - The pitch energy modules are ultracapacitor-based and are designed to replace lead acid batteries in wind turbine platforms, managing energy for blade angle adjustments [3]. Group 2: Customer Feedback and Impact - TransAlta Corporation highlighted that pitch faults due to weak batteries are a leading cause of downtime, and the switch to Richardson's ultracapacitors has been an excellent upgrade, reducing the need for hub entries and increasing revenue potential [4]. - The positive feedback from TransAlta reflects the effectiveness of Richardson's innovative solutions in enhancing operational efficiency and reducing maintenance challenges [4]. Group 3: Company Overview - Richardson Electronics is a global manufacturer of engineered solutions, with over 50% of its products manufactured in the U.S. and Germany, serving various markets including alternative energy and healthcare [6][9]. - The company focuses on providing specialized technical expertise and engineered solutions, emphasizing design-in support, systems integration, and aftermarket services [7][10].

Core Viewpoint - Richardson Electronics, Ltd. will present at the Planet MicroCap Showcase: VEGAS 2025 on April 23, 2025, highlighting its engineered solutions for various markets [1][2]. Company Overview - Richardson Electronics, Ltd. is a global manufacturer specializing in engineered solutions, green energy products, power management, and custom display solutions [2]. - The company produces over 50% of its products in LaFox, Illinois, Marlborough, Massachusetts, and Donaueschingen, Germany, as well as through global manufacturing partners [2]. - The company serves diverse markets including alternative energy, healthcare, aviation, broadcast, communications, industrial, marine, medical, military, scientific, and semiconductor sectors [2]. - Richardson Electronics focuses on providing specialized technical expertise and engineered solutions through design-in support, systems integration, prototype design, testing, logistics, and aftermarket services [2]. Event Details - The presentation at the Planet MicroCap Showcase will take place on April 23, 2025, from 11:30 AM to 12:00 PM PT [1]. - Investors can access the live presentation via a provided webcast link [1]. - One-on-one investor meetings will be conducted in person at the conference venue, Paris Hotel & Casino in Las Vegas, NV [1].

Financial Performance - Net sales for the third quarter of fiscal 2025 were $53.8 million, an increase of 2.7% compared to $52.4 million in the same period of fiscal 2024[106]. - Net sales for the first nine months of fiscal 2025 were $157.0 million, reflecting a 5.3% increase from $149.1 million in the first nine months of fiscal 2024[108]. - Sales for the Power and Microwave Technologies (PMT) segment increased by 6.6% in the third quarter of fiscal 2025, primarily due to higher sales of engineered solutions for the semiconductor wafer fabrication market[107]. - The Green Energy Solutions (GES) segment saw a 26.0% increase in sales during the first nine months of fiscal 2025, driven by increased shipments of power management products[108]. - The Healthcare segment experienced a 32.3% decrease in sales during the third quarter of fiscal 2025, attributed to the sale of the majority of Healthcare assets to DirectMed[107]. Profitability and Margins - Gross margin increased to 31.0% during the third quarter of fiscal 2025, up from 29.5% in the third quarter of fiscal 2024[106]. - Consolidated gross profit increased to $16.7 million in Q3 FY2025, up from $15.4 million in Q3 FY2024, with a gross margin of 31.0% compared to 29.5%[110]. - Gross profit for the PMT segment was $10.2 million, representing 30.8% of net sales in the third quarter of fiscal 2025, compared to $8.8 million, or 28.3%, in the same period of fiscal 2024[109]. - GES net sales decreased 19.4% to $9.3 million in Q3 FY2025, primarily due to a large order in Q3 FY2024 that did not repeat, while gross margin improved to 32.8%[114]. - Healthcare net sales fell 32.3% to $2.1 million in Q3 FY2025, with gross margin dropping to 15.5% from 41.6% due to manufacturing issues[118]. Expenses and Losses - Selling, general and administrative expenses were $14.5 million, or 26.9% of net sales, during the third quarter of fiscal 2025, compared to $14.4 million, or 27.6% of net sales, in the same period of fiscal 2024[106]. - Operating loss for the third quarter of fiscal 2025 was $2.7 million, compared to an operating income of $1.0 million in the third quarter of fiscal 2024[106]. - Net loss for Q3 FY2025 was $2.1 million, or $0.15 per diluted share, compared to a net income of $0.8 million in Q3 FY2024[129]. Cash Flow and Financing - Cash and cash equivalents were $36.7 million as of March 1, 2025, with $20.3 million in North America[133]. - Operating activities generated $10.5 million of cash during the first nine months of FY2025, despite a net loss of $2.2 million[139]. - The company established a $30 million revolving credit facility, with no amounts outstanding as of the end of Q3 FY2025[137]. - Cash provided by investing activities was $5.0 million during the first nine months of fiscal 2025, primarily from $7.0 million proceeds from the disposal of Healthcare assets[141]. - Cash used by financing activities was $2.4 million during the first nine months of fiscal 2025, primarily due to $2.6 million in dividend payments[144]. Accounting and Risk Management - There have been no material changes in critical accounting estimates from the previous annual report[145]. - No specific events or circumstances have been identified that would require updates to estimates, assumptions, and judgments[145]. - The company is exposed to foreign currency exchange risks, managing these through normal operating and financing activities[148]. Other Financial Metrics - Non-cash stock-based compensation expense was $1.0 million, with inventory reserve provisions of $0.5 million and depreciation and amortization expense of $3.2 million[140]. - Changes in operating assets and liabilities used $5.7 million in cash, including a $2.2 million increase in inventory and a $5.2 million decrease in accounts payable[140]. - Cash used in investing activities was $3.1 million during the first nine months of fiscal 2024, primarily for capital expenditures related to IT systems and LaFox manufacturing[142]. - Cash used by financing activities was $2.3 million during the first nine months of fiscal 2024, primarily due to $2.5 million in dividend payments[144].

Financial Data and Key Metrics Changes - Consolidated net sales for Q3 FY 2025 increased by 2.7% to $53.8 million compared to $52.4 million in Q3 FY 2024, marking the third consecutive quarterly year-over-year increase in sales [11] - Non-GAAP operating profit for Q3 FY 2025 rose to $2.2 million, up from $1 million in the prior year [6][12] - Consolidated gross margin for Q3 FY 2025 was 31.0%, up from 29.5% in Q3 FY 2024, driven by margin expansion in PMT and GES [13] - Net loss for Q3 FY 2025 was $2.1 million, while non-GAAP net income was $1.6 million, compared to a net income of $0.8 million in Q3 FY 2024 [15] Business Line Data and Key Metrics Changes - Semiconductor wafer fab sales surged by 139% year-over-year, while Canvys sales increased by 39.5% [5][12] - PMT sales grew by 6.6% due to higher sales to semiconductor wafer fab customers [12] - GES sales totaled $9.3 million, a 55% increase over Q2 FY 2025 but down 19% year-over-year due to lower sales of wind turbine battery modules [23] - Canvys net sales increased by 39.5% to $9.2 million in Q3 FY 2025, driven by higher sales in North American markets [36] Market Data and Key Metrics Changes - The backlog for GES and PMT remained strong at $95 million at the end of Q3 FY 2025 [27] - Canvys' backlog at the end of Q3 FY 2025 was $36.6 million, providing a robust foundation for future business [36] Company Strategy and Development Direction - The company is focusing on core businesses, particularly Green Energy Solutions, following the sale of its Healthcare business [7][42] - The strategic transaction is expected to simplify the business and improve the financial model long-term [42] - The company aims to capitalize on policies driving manufacturing back to the US and increase the need for US content [8] - Investments will be made in business development and engineering teams to improve market reach and time to market [49] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about growth opportunities in semiconductor wafer fab equipment and Green Energy Solutions [53] - The current operating environment is described as fluid, with expectations of limited market growth in the US but continued sales growth through market share gains [29] - The company is well-positioned to differentiate itself in global niche markets like energy storage [48] Other Important Information - The company ended Q3 FY 2025 with no debt and $36.7 million in cash and equivalents [19] - A quarterly cash dividend of $0.06 per common share was declared, to be paid in Q4 FY 2025 [20] Q&A Session Summary Question: What should we expect in terms of sequential growth for GES? - Management expects growth in Q4 FY 2025 and FY 2026 based on backlog and inventory position [57] Question: Are there any cancellations or delays in projects? - No cancellations reported; all identified programs are moving forward [60] Question: How is the semiconductor wafer fab business performing? - Strong growth is expected to continue, with visibility from corporate and engineering teams [62] Question: How will capital allocation be handled post-Healthcare sale? - Initial investments will focus on expanding existing products and technologies [86] Question: Can you provide updates on Progress Rail and Wabtec? - Significant orders are being processed, with shipments expected in FY 2026 [94][97] Question: What are the expected losses from the Healthcare segment? - Specific loss figures are not disclosed, but efforts are being made to minimize them [104]

Financial Data and Key Metrics Changes - Consolidated net sales for Q3 FY 2025 increased by 2.7% to $53.8 million compared to $52.4 million in Q3 FY 2024, marking the third consecutive quarterly year-over-year increase in sales [11] - Non-GAAP operating profit for Q3 FY 2025 rose to $2.2 million, up from $1 million in the prior year [6][14] - Consolidated gross margin for Q3 FY 2025 was 31.0%, up from 29.5% in Q3 FY 2024, driven by margin expansion in PMT and GES [13] - Net loss for Q3 FY 2025 was $2.1 million, while non-GAAP net income was $1.6 million, compared to a net income of $0.8 million in Q3 FY 2024 [15] Business Line Data and Key Metrics Changes - Semiconductor wafer fab sales surged by 139% year-over-year, contributing significantly to overall sales growth [5][12] - Canvys sales increased by 39.5% to $9.2 million in Q3 FY 2025, driven by higher sales in North American markets [36] - GES sales totaled $9.3 million, a 55% increase over Q2 FY 2025 but down 19% year-over-year due to lower sales of wind turbine battery modules [23] Market Data and Key Metrics Changes - The backlog for GES and PMT remained strong at $95 million at the end of Q3 FY 2025, indicating robust future demand [27] - Canvys' backlog at the end of Q3 FY 2025 was $36.6 million, providing a solid foundation for future business [36] Company Strategy and Development Direction - The company is focusing on core businesses, particularly Green Energy Solutions, following the sale of its Healthcare assets [7][42] - The strategic transaction is expected to simplify the business and improve the financial model long-term, allowing for prioritization of profitable opportunities in high-growth markets [42][48] - The company plans to invest proceeds from the Healthcare asset sale into growth initiatives, especially in Green Energy Solutions and other high-growth complementary businesses [43] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about capitalizing on policies driving manufacturing back to the US and the need for US content [8] - The current operating environment is described as fluid, with expectations of limited market growth in the US but opportunities for market share growth and new product introductions [29] - The company is well-positioned to differentiate itself in global niche markets like energy storage, with significant projected growth in the energy storage market [47][48] Other Important Information - The company achieved positive operating cash flow for the fourth consecutive quarter, ending with $36.7 million in cash and equivalents [5][19] - Capital expenditures in Q3 FY 2025 were $0.5 million, primarily related to facilities and IT systems [20] Q&A Session Summary Question: What should we expect in terms of sequential growth for GES? - Management expects growth in Q4 FY 2025 and FY 2026 based on strong backlog and inventory position [57] Question: Are there any cancellations or delays in projects? - No cancellations reported; all identified programs are moving forward, although timing has been slower than desired [60] Question: How is the semiconductor wafer fab business performing? - The business is expected to grow in Q4 FY 2025, with strong performance anticipated for the fiscal year [62] Question: How will capital allocation be handled post-Healthcare sale? - Initial investments will focus on expanding existing products and technologies, with M&A strategy to be discussed later [86] Question: Can you provide updates on Progress Rail and Wabtec? - Significant orders are being processed, with shipments expected to begin in FY 2026 [94][97] Question: What are the expected losses from the Healthcare segment? - Specific figures are not disclosed, but efforts are being made to minimize losses as the company transitions [104]

Core Insights - Richardson Electronics (RELL) reported quarterly earnings of $0.11 per share, exceeding the Zacks Consensus Estimate of $0.08 per share, and up from $0.05 per share a year ago [1] - The earnings surprise was 37.50%, contrasting with a previous quarter where a loss of $0.02 per share was expected, but the company reported a loss of $0.05, resulting in a surprise of -150% [2] - The company posted revenues of $53.8 million for the quarter, missing the Zacks Consensus Estimate by 1.70%, compared to $52.38 million in the same quarter last year [3] Financial Performance - Over the last four quarters, Richardson Electronics has surpassed consensus EPS estimates three times [2] - The company has topped consensus revenue estimates only once in the last four quarters [3] - The current consensus EPS estimate for the upcoming quarter is $0.15 on revenues of $56.32 million, and for the current fiscal year, it is $0.22 on revenues of $214.26 million [8] Market Position - Richardson Electronics shares have declined approximately 34.9% since the beginning of the year, while the S&P 500 has decreased by 15.3% [4] - The Zacks Industry Rank for Electronics - Parts Distribution is in the bottom 23% of over 250 Zacks industries, indicating potential underperformance compared to higher-ranked industries [9] Future Outlook - The company's earnings outlook is currently unfavorable, leading to a Zacks Rank 4 (Sell), suggesting expected underperformance in the near future [7] - The trend of estimate revisions for Richardson Electronics has been unfavorable ahead of the earnings release, which may change following the recent report [6][7]

Financial Performance - Q3 FY25 net sales were $53.8 million, a 2.7% increase from $52.4 million in Q3 FY24[4] - Year-to-date net sales for the first nine months of FY25 were $157.0 million, a 5.3% increase from $149.1 million in the same period of FY24[17] - Net sales for the three months ended March 1, 2025, were $53,804 thousand, representing a 2.7% increase from $52,375 thousand for the same period in 2024[37] - The PMT segment saw a 6.6% increase in net sales to $33,216 thousand for the three months ended March 1, 2025, while the GES segment experienced a 19.4% decline to $9,299 thousand[37] - The healthcare segment's net sales decreased by 32.3% to $2,094 thousand for the three months ended March 1, 2025[37] Profitability - Non-GAAP operating income for Q3 FY25 rose to $2.2 million, up from $1.0 million in the prior year[3] - Non-GAAP net income for the three months ended March 1, 2025, was $1,581 thousand compared to $750 thousand in the same period last year[39] - Non-GAAP Earnings Per Common Share (Diluted) for the three months ended March 1, 2025, was $0.11, up from $0.05 in the same period of 2024[21] - Adjusted EBITDA for the three months ended March 1, 2025, was $2,806,000, compared to $2,083,000 for the same period in 2024, indicating growth[22] - The company reported a net loss of $2.1 million for Q3 FY25, compared to a net income of $0.8 million in Q3 FY24[12] - The company reported a net loss of $2,057 thousand for the three months ended March 1, 2025, compared to a net income of $750 thousand for the same period in 2024[35] - The company reported a comprehensive loss of $(2,759) thousand for the three months ended March 1, 2025, compared to a comprehensive income of $545 thousand for the same period in 2024[35] Expenses and Liabilities - Operating expenses were $14.5 million, slightly up from $14.4 million in Q3 FY24[8] - Total liabilities as of March 1, 2025, were $36,910,000, compared to $34,493,000 on June 1, 2024, showing an increase[31] - Depreciation and amortization expenses for the nine months ended March 1, 2025, totaled $3,037 million, down from $3,218 million for the same period in 2024[40] Cash and Assets - The company ended Q3 FY25 with $36.7 million in cash and equivalents, with no debt[2] - Cash and cash equivalents increased to $36,675,000 as of March 1, 2025, from $24,263,000 on June 1, 2024[31] - Total current assets as of March 1, 2025, were $163,514,000, slightly up from $161,654,000 on June 1, 2024[31] - The company’s total assets decreased to $189,810,000 as of March 1, 2025, from $192,445,000 on June 1, 2024[31] - The company’s retained earnings decreased to $79,117,000 as of March 1, 2025, from $83,729,000 on June 1, 2024[31] Future Outlook - The company plans to host a conference call on April 10, 2025, to discuss its third quarter fiscal-year 2025 results[25] - The company declared a quarterly cash dividend of $0.06 per share, payable on May 28, 2025[18] Adjusted Metrics - The adjusted EBITDA for the nine months ended March 1, 2025, was $4,458 million, an increase from $3,514 million for the same period in 2024[40] - The adjusted EBITDA for the three months ended March 1, 2025, was $2,806 million, an increase from $2,083 million for the same period in 2024[40] - The company reported a decrease in EBITDA for the nine months ended March 1, 2025, to $(458) million from $3,514 million for the same period in 2024[40]

Financial Performance - Richardson Electronics reported net sales of $53.8 million for Q3 FY25, a 2.7% increase from $52.4 million in Q3 FY24 [4] - The year-over-year growth was driven by a 139% surge in semiconductor wafer fab sales and a 39.5% increase in Canvys sales [2][5] - The company achieved positive operating cash flow for the fourth consecutive quarter and ended the quarter with no debt and $36.7 million in cash and equivalents [2][15] Strategic Developments - The strategic sale of a majority of Richardson Healthcare assets during the quarter strengthened the company's balance sheet and is expected to simplify operations [1][3] - The company recorded a one-time loss of $4.9 million from the sale of Healthcare assets, but non-GAAP operating income rose to $2.2 million, up from $1.0 million in the previous year [3][11] Segment Performance - Power and Microwave Technologies Group (PMT) sales increased by $2.1 million, or 6.6%, primarily due to higher demand from semiconductor wafer fab customers [5] - Canvys sales increased by $2.6 million, or 39.5%, reflecting improved market conditions in North America [5] - Healthcare sales decreased by $1.0 million, or 32.3%, due to lower net sales following the asset sale [5] Gross Margin and Operating Expenses - Gross margin for Q3 FY25 was 31.0%, up from 29.5% in Q3 FY24, with PMT and GES showing improvements in gross margin [7][39] - Operating expenses slightly increased to $14.5 million from $14.4 million in Q3 FY24, primarily due to higher employee compensation [8] Backlog and Future Outlook - The backlog at the end of Q3 FY25 totaled $134.1 million, down from $142.6 million at the end of Q2 FY25, with decreases noted in GES, Canvys, and Healthcare [6] - The company maintains a solid sales pipeline, although the timing of new orders may vary [6] Cash Dividend - The Board of Directors declared a quarterly cash dividend of $0.06 per share, payable on May 28, 2025, to common stockholders of record as of May 9, 2025 [18]