Group 1 - Richardson Electronics, Ltd. will present and host one-on-one meetings at the Sidoti & Company Small-Cap Virtual Conference on September 17-18, 2025 [1] - Edward J. Richardson, Chairman and CEO, and Wendy Diddell, COO, will give a formal presentation on September 17 at 2:30 P.M. ET [1] - Registration for the conference is free and open to all participants [2] Group 2 - Richardson Electronics is a global manufacturer of engineered solutions, focusing on green energy products, power management, and custom display solutions [2] - Over 55% of the company's products are manufactured in LaFox, Illinois, Marlborough, Massachusetts, or Donaueschingen, Germany [2] - The company serves various markets including alternative energy, healthcare, aviation, and semiconductor industries [2] Group 3 - Richardson Electronics' common stock trades on the NASDAQ Global Select Market under the ticker symbol RELL [3]

Company Expansion - Richardson Electronics will expand its operations at its manufacturing headquarters in La Fox, Illinois, with a capital investment of over $8.5 million over the next four years [1][4] - The expansion will retain nearly 200 skilled employees and create 54 new full-time jobs in the region [1][4] Clean Energy Commitment - The expansion is supported by the Reimagining Energy and Vehicles in Illinois (REV Illinois) program, which aims to build a clean energy economy and attract investments [2][4] - Richardson Electronics plans to develop next-generation energy storage products to support electric grid stability, addressing issues like brownouts and reducing electricity costs [2][3] Technological Development - The company will invest in equipment and structural upgrades to research, develop, and produce battery energy storage system (BESS) technologies [2][3] - These technologies are targeted for industries such as manufacturing, healthcare, and critical infrastructure operations [2] State Support and Incentives - The REV Illinois program provides targeted support for clean energy production and advanced manufacturing, which includes tax credits for Richardson Electronics' capital investment [4] - The agreement specifies the retention of 190 jobs throughout the agreement period [4] Industry Context - Richardson Electronics' decision to expand aligns with other manufacturing companies establishing or expanding in Illinois, highlighting the state's skilled workforce and commitment to clean energy [3]

PART I This part provides an overview of the company's business operations, risk factors, and legal disclosures [ITEM 1. Business](index=4&type=section&id=Item%201.%20Business) Richardson Electronics manufactures engineered solutions, green energy, and display products; Healthcare assets sold in FY2025 - Richardson Electronics, Ltd. is a global manufacturer of engineered solutions, green energy products, power grid and microwave tubes, and customized display solutions, serving diverse markets including alternative energy, healthcare, and semiconductor[16](index=16&type=chunk) - On January 24, 2025, the Company sold a substantial portion of its Healthcare business assets to DirectMed Imaging, LLC, and entered into an exclusive 10-year global supply agreement for repaired Siemens CT X-ray tubes and manufacturing of ALTA CT X-ray tubes[17](index=17&type=chunk) - The Healthcare asset sale resulted in a total loss of **$5.1 million** recorded for the fiscal year ended May 31, 2025[17](index=17&type=chunk) [General](index=4&type=section&id=General) This section provides general information about the company's business and operations [Government Regulations](index=4&type=section&id=Government%20Regulations) This section outlines the government regulations impacting the company's operations [Geography](index=5&type=section&id=Geography) This section details the geographic scope of the company's business activities [Business Segments](index=5&type=section&id=Business%20Segments) The company operates through distinct business segments, each focusing on specific product lines and markets [Power and Microwave Technologies (PMT)](index=5&type=section&id=Power%20and%20Microwave%20Technologies%20%28%22PMT%22%29) This segment focuses on power grid and microwave tubes and related engineered solutions [Green Energy Solutions (GES)](index=6&type=section&id=Green%20Energy%20Solutions%20%28%22GES%22%29) This segment provides products and solutions for the green energy market [Canvys](index=6&type=section&id=Canvys) This segment specializes in customized display solutions for various applications [Healthcare](index=6&type=section&id=Healthcare) This segment previously offered healthcare products, with significant assets sold in fiscal 2025 [Sales and Product Management](index=7&type=section&id=Sales%20and%20Product%20Management) This section describes the company's sales strategies and product management processes [Distribution](index=7&type=section&id=Distribution) This section details the company's global distribution network and logistics [International Sales](index=7&type=section&id=International%20Sales) This section covers the company's sales activities in international markets [Major Customers](index=7&type=section&id=Major%20Customers) This section identifies the company's significant customer relationships [Human Capital](index=8&type=section&id=Human%20Capital) This section provides an overview of the company's human resources and workforce management [Recruitment & Staffing](index=8&type=section&id=Recruitment%20%26%20Staffing) This section outlines the company's strategies for attracting and retaining talent [Employees](index=8&type=section&id=Employees) This section provides information regarding the company's employee base and structure [Culture](index=8&type=section&id=Culture) This section describes the company's organizational culture and values [Website Access to SEC Reports](index=8&type=section&id=Website%20Access%20to%20SEC%20Reports) This section details how to access the company's SEC filings online [ITEM 1A. Risk Factors](index=9&type=section&id=Item%201A.%20Risk%20Factors) The company faces risks from sales, inventory, competition, supply chain, IT, international operations, finance, legal, and concentrated ownership - Key business and operational risks include failure to achieve sales and margin targets, significant inventory obsolescence charges due to evolving technology, and intense competitive pressures[47](index=47&type=chunk)[48](index=48&type=chunk)[49](index=49&type=chunk) - The Company is dependent on a limited number of vendors, with **two suppliers each representing over 10% of total cost of sales in fiscal 2025**, and faces risks from supply chain disruptions and reliance on information technology systems, including cybersecurity threats[51](index=51&type=chunk)[52](index=52&type=chunk)[53](index=53&type=chunk) - International operations, which account for **56% of sales**, expose the Company to risks such as foreign currency exchange rate fluctuations, unstable political/economic conditions, and tariffs on products manufactured in China[39](index=39&type=chunk)[67](index=67&type=chunk)[69](index=69&type=chunk)[70](index=70&type=chunk) - Legal and regulatory risks include potential intellectual property claims, substantial operational costs to comply with data privacy laws (e.g., GDPR, CCPA), and compliance with trade, export controls, and anti-corruption laws[72](index=72&type=chunk)[75](index=75&type=chunk)[78](index=78&type=chunk) - Edward J. Richardson, Chairman, CEO, and President, beneficially owned approximately **61% of the voting power of outstanding common stock** as of July 28, 2025, allowing him to exert control over stockholder votes[82](index=82&type=chunk) [Business and Operational Risks](index=9&type=section&id=Business%20and%20Operational%20Risks) This section details risks related to the company's core business activities and operational processes [Risks Related to International Operations](index=13&type=section&id=Risks%20Related%20to%20International%20Operations) This section outlines specific risks associated with the company's global business presence [Financial Risks](index=14&type=section&id=Financial%20Risks) This section describes risks pertaining to the company's financial condition and capital structure [Legal and Regulatory Risks](index=14&type=section&id=Legal%20and%20Regulatory%20Risks) This section covers risks arising from legal proceedings and regulatory compliance requirements [Ownership Risks](index=16&type=section&id=Ownership%20Risks) This section addresses risks related to the company's ownership structure and control [General Risk Factors](index=16&type=section&id=General%20Risk%20Factors) This section includes broad risk factors that could generally impact the company's business [ITEM 1B. Unresolved Staff Comments](index=17&type=section&id=Item%201B.%20Unresolved%20Staff%20Comments) The Company reported no unresolved staff comments from the SEC - There are no unresolved staff comments[89](index=89&type=chunk) [ITEM 1C. Cybersecurity](index=18&type=section&id=Item%201C.%20Cybersecurity) The company manages cybersecurity risks via a NIST-based framework and IRP, with Board oversight, and has not experienced material impacts from threats - The Company's cybersecurity risk management program follows the U.S. National Institute of Standards and Technology (NIST) Cyber Security Framework, focusing on identifying, assessing, managing, and remediating material risks[91](index=91&type=chunk)[92](index=92&type=chunk) - An established Incident Response Plan (IRP) is executed by an Incident Response Team (IRT), led by the Information Systems Director, involving internal IT professionals and cross-functional stakeholders, potentially engaging external resources[93](index=93&type=chunk)[94](index=94&type=chunk) - Cybersecurity threats have not materially affected the Company's business strategy, results of operations, or financial condition in the past three fiscal years[95](index=95&type=chunk) - The Board of Directors delegates cybersecurity risk oversight to the Audit Committee, which receives quarterly updates from the CFO on incidents, threats, mitigation strategies, and controls[97](index=97&type=chunk)[98](index=98&type=chunk) [Risk Management and Strategy](index=18&type=section&id=Risk%20Management%20and%20Strategy) This section details the company's approach to managing cybersecurity risks and strategic initiatives [Governance](index=19&type=section&id=Governance) This section outlines the governance structure for cybersecurity oversight within the company [ITEM 2. Properties](index=20&type=section&id=Item%202.%20Properties) The company operates one owned and 24 leased global facilities, including its Illinois headquarters, supporting manufacturing, sales, and distribution across all segments - The Company owns one facility and leases **24 facilities globally**, including its corporate headquarters and largest distribution center in LaFox, Illinois (**224,000 sq ft**)[99](index=99&type=chunk) - Facilities are geographically diverse across North America, Asia/Pacific, Europe, and Latin America, serving PMT, Canvys, GES, and Healthcare segments for corporate, sales, distribution, and manufacturing purposes[99](index=99&type=chunk)[100](index=100&type=chunk) [ITEM 3. Legal Proceedings](index=20&type=section&id=Item%203.%20Legal%20Proceedings) The Company reported no material legal proceedings - There are no legal proceedings to report[101](index=101&type=chunk) [ITEM 4. Mine Safety Disclosure](index=20&type=section&id=Item%204.%20Mine%20Safety%20Disclosure) The Company stated that Mine Safety Disclosure is not applicable to its operations - Mine Safety Disclosure is not applicable[102](index=102&type=chunk) PART II This part covers market information, financial performance, and internal controls [ITEM 5. Market for the Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities](index=21&type=section&id=Item%205.%20Market%20for%20the%20Registrant%27s%20Common%20Equity%2C%20Related%20Stockholder%20Matters%20and%20Issuer%20Purchases%20of%20Equity%20Securities) The company's common stock trades on NASDAQ (RELL), paid $3.4 million in annual dividends, and joined the Russell 3000® Index in 2023 - The Company's common stock is traded on the NASDAQ Global Select Market

Core Insights - Richardson Electronics, Ltd. has announced a partnership with KEBA Industrial Automation to develop cost-efficient pitch systems for wind turbines in North America, enhancing compatibility and deployment speed in the renewable energy sector [1][4] - KEBA has over 20 years of experience in providing pitch control systems for wind turbines, ensuring reliability and performance in both onshore and offshore installations [2] - The new pitch systems from KEBA are designed to reduce material input and operating costs while providing flexibility and compliance with global grid codes, thus enhancing long-term value for wind turbine operators [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 [5] - KEBA Industrial Automation specializes in high-quality servo drive and automation solutions, with a focus on innovation and seamless integration across multiple industries, including wind energy [10]

Core Insights - Richardson Electronics, Ltd. (RELL) has successfully transformed from a niche parts distributor to a company that designs and builds complex, high-reliability equipment for military systems, clean-energy projects, and large-scale applications [1] Company Overview - The company focuses on producing objective, data-driven research primarily about small- to mid-cap companies, which are often overlooked by many investors [1] - Occasionally, the company also analyzes large-cap names to provide a broader perspective on the equity markets [1]

Financial Data and Key Metrics Changes - In Q4 FY 2025, total sales increased to $51.9 million, up from $47.4 million in Q4 FY 2024, marking a 9.5% year-over-year growth [10][6] - Gross margin improved by 50 basis points to 31.6% compared to 31.1% in the same quarter last year [11][7] - Operating income for Q4 was $600,000, a turnaround from an operating loss of $100,000 in Q4 FY 2024 [13] - Net income for Q4 was $1.1 million, compared to a net loss of $100,000 in the prior year [13] - For FY 2025, net sales were $208.9 million, a 6.3% increase from $196.5 million in FY 2024 [14] Business Line Data and Key Metrics Changes - PMT sales grew by 17.8% year-over-year in Q4, driven by demand from semiconductor wafer fab customers [11] - GES sales increased by 14.1% in Q4, attributed to higher demand for wind turbine modules [11] - Canvas reported Q4 revenue of $9.5 million, up from $8.7 million in the same quarter last year [31] Market Data and Key Metrics Changes - The company faced elevated inflation and supply chain pressures, particularly in Europe and Asia, but managed to achieve growth across all business units [5][6] - GES backlog grew to $42.5 million in Q4, contributing to a combined backlog of over $99 million for GES and PMT [23] Company Strategy and Development Direction - The company is focused on expanding its green energy products and enhancing its manufacturing capabilities in the U.S. [41][40] - Strategic initiatives include faster design-to-production cycles and the establishment of a new design center in Texas [22] - The company aims to leverage technology partnerships to fill gaps and reduce tariff risks [24][27] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in navigating a challenging global environment and highlighted the importance of maintaining operational agility [5][6] - The company anticipates continued growth in FY 2026, supported by a strong backlog and strategic initiatives [29][30] - Management acknowledged the potential impact of new tariffs but emphasized their ability to adapt and mitigate risks [27][24] Other Important Information - The company reported a strong cash position of $35.9 million at the end of FY 2025, providing flexibility for operations and growth opportunities [16] - The Board declared a quarterly cash dividend of $0.06 per common share, reflecting confidence in financial stability [18] Q&A Session Summary Question: Update on selling ultracapacitor products to GE turbines - The company is in discussions with GE regarding final testing and paperwork, which is currently pending [48][49] Question: Potential customer list after GE agreement - The agreement could increase the serviceable available market by approximately 35%, opening up significant opportunities [51] Question: Product wins in green energy solutions - The company highlighted market share gains and several key agreements, including those with RWE and TransAlta, contributing to growth [55][56] Question: Competitive advantages in PMT - The company noted that its main competitors include industrial distributors and highlighted its unique demand creation and design capabilities [62][68] Question: Strategic opportunities and acquisitions - The company is focusing on expanding green energy products and is open to future acquisition opportunities that align with its strategic goals [69]

Financial Performance - FY2025 net sales increased by 63% year-over-year to $2089 million, driven by higher sales in the company's three continuing business segments[58] - Non-GAAP net income for fiscal year 2025 was $32 million, compared to $05 million in fiscal year 2024[59] - The company's cash and cash equivalents stand at $359 million with no debt[61] Strategic Initiatives - Richardson Electronics sold most of its Healthcare assets to DirectMed Imaging in January 2025 for $82 million, retaining CT tube engineering and manufacturing under an exclusive supply agreement[15] - The company intends to use proceeds from the Healthcare asset sale to invest in growth initiatives, primarily within its GES reportable segment[15] - Total backlog at the end of Q4 FY2025 was $1342 million, up more than 125% since FY2019[70] Business Segments - Power & Microwave Technology (PMT) revenue for FY2025 was $1378 million[19] - Green Energy Solutions (GES) revenue for FY2025 was $287 million[19] - Canvys revenue for FY2025 was $331 million[19] Market Opportunities - The company sees a $454 million global Total Addressable Market (TAM) opportunity in wind turbine pitch energy modules[39] - The global market for battery deployments is projected to grow to $114 billion by 2032, reflecting a CAGR of 21% over 8 years[46]

Core Viewpoint - Richardson Electronics reported quarterly earnings of $0.12 per share, exceeding the Zacks Consensus Estimate of $0.05 per share, and showing an increase from $0.02 per share a year ago [1] Financial Performance - The earnings surprise for the quarter was +140.00%, with the company previously expected to post earnings of $0.08 per share but actually reporting $0.11, resulting in a surprise of +37.5% [2] - The company posted revenues of $51.89 million for the quarter ended May 2025, which was 3.64% below the Zacks Consensus Estimate, compared to $47.37 million in revenues a year ago [3] Stock Performance - Richardson Electronics shares have declined approximately 31.3% since the beginning of the year, while the S&P 500 has gained 7.3% [4] - The current Zacks Rank for the stock is 3 (Hold), indicating expected performance in line with the market in the near future [7] Future Outlook - The current consensus EPS estimate for the upcoming quarter is -$0.01 on revenues of $54 million, and for the current fiscal year, it is $0.14 on revenues of $219.5 million [8] - The outlook for the Electronics - Parts Distribution industry is currently in the bottom 12% of over 250 Zacks industries, which may impact the stock's performance [9]

[Executive Summary & Company Overview](index=1&type=section&id=Executive%20Summary%20%26%20Company%20Overview) Richardson Electronics closed FY25 with strong Q4 sales and positive operating cash flow, driven by Green Energy Solutions, focusing on engineered solutions [Key Highlights](index=1&type=section&id=Key%20Highlights) Richardson Electronics achieved strong Q4 and FY25 sales growth, positive operating cash flow, and declared a dividend, driven by Green Energy Solutions - Q4 FY25 net sales increased **9.5%** YoY, marking the **4th consecutive quarter** of growth[1](index=1&type=chunk)[3](index=3&type=chunk) - FY25 annual net sales grew **6.3%** YoY, with Green Energy Solutions (GES) increasing by **23.6%**[1](index=1&type=chunk)[13](index=13&type=chunk) - Ended Q4 FY25 with **positive operating cash flow** for the **5th consecutive quarter**[1](index=1&type=chunk)[2](index=2&type=chunk) - Board of Directors declared a **$0.06** per share quarterly cash dividend[1](index=1&type=chunk)[19](index=19&type=chunk) - The company's strategic focus is on expanding value-added engineered solutions, scaling the GES business, and identifying opportunities for sales and profitability growth[2](index=2&type=chunk) [About Richardson Electronics, Ltd.](index=7&type=section&id=About%20Richardson%20Electronics%2C%20Ltd.) Richardson Electronics manufactures engineered solutions and green energy products, emphasizing in-house production and specialized technical expertise - Richardson Electronics is a global manufacturer of engineered solutions, green energy products, power grid and microwave tubes, power conversion, RF and microwave components, and customized display solutions[29](index=29&type=chunk) - Over **55%** of products are manufactured in LaFox, IL, Marlborough, MA, Donaueschingen, Germany, or by global manufacturing partners adhering to strict specifications and a Supplier Code of Conduct[29](index=29&type=chunk) - The company serves markets such as alternative energy, healthcare, aviation, broadcast, communications, industrial, marine, medical, military, scientific, and semiconductor[29](index=29&type=chunk) - Strategy involves providing specialized technical expertise and 'engineered solutions' through design-in support, systems integration, prototype design and manufacturing, testing, logistics, and aftermarket technical service[29](index=29&type=chunk) [Fourth Quarter Fiscal Year 2025 Financial Performance](index=2&type=section&id=Fourth%20Quarter%20Fiscal%20Year%202025%20Financial%20Performance) Q4 FY25 saw a **9.5%** net sales increase, improved gross margin, and positive operating income, driven by PMT and GES growth [Net Sales by Segment](index=2&type=section&id=Net%20Sales%20by%20Segment_Q4) Q4 FY25 net sales increased **9.5%** to **$51.9 million**, driven by PMT, GES, and Canvys, despite Healthcare asset divestiture Q4 FY25 Net Sales by Strategic Business Unit (SBU) | SBU | May 31, 2025 (in thousands) | June 1, 2024 (in thousands) | % Change YoY | | :---- | :-------------------------- | :-------------------------- | :----------- | | PMT | $35,937 | $30,498 | 17.8% | | GES | $5,360 | $4,699 | 14.1% | | Canvys | $9,461 | $8,674 | 9.1% | | Healthcare | $1,131 | $3,503 | -67.7% | | **Total** | **$51,889** | **$47,374** | **9.5%** | - PMT sales increased due to higher demand from semiconductor wafer fab customers and distributed products for RF and Microwave applications[4](index=4&type=chunk) - GES sales growth was driven by higher sales of wind turbine battery modules[4](index=4&type=chunk) - Canvys sales improved due to better market conditions in Europe[4](index=4&type=chunk) - The sale of most Healthcare assets in January 2025 reduced Q4 sales by **$2.4 million** compared to the prior year[4](index=4&type=chunk) - Backlog totaled **$134.2 million** at the end of Q4 FY25, stable compared to **$134.1 million** at the end of Q3 FY25, with GES backlog increasing[5](index=5&type=chunk) [Gross Profit and Margin by Segment](index=2&type=section&id=Gross%20Profit%20and%20Margin%20by%20Segment_Q4) Q4 gross margin expanded to **31.6%** due to favorable product mix in PMT and GES, despite declines in Canvys and Healthcare Q4 FY25 Gross Profit and Margin by Strategic Business Unit (SBU) | SBU | May 31, 2025 Gross Profit (in thousands) | May 31, 2025 % of Net Sales | June 1, 2024 Gross Profit (in thousands) | June 1, 2024 % of Net Sales | | :---- | :----------------------------------- | :------------------------- | :----------------------------------- | :------------------------- | | PMT | $11,680 | 32.5% | $9,486 | 31.1% | | GES | $1,693 | 31.6% | $1,196 | 25.5% | | Canvys | $3,041 | 32.1% | $2,903 | 33.5% | | Healthcare | ($39) | -3.4% | $1,139 | 32.5% | | **Total** | **$16,375** | **31.6%** | **$14,724** | **31.1%** | - PMT and GES gross margins increased due to a favorable product mix[6](index=6&type=chunk) - Canvys gross margin decreased primarily due to product mix and higher freight costs[6](index=6&type=chunk) [Operating Expenses and Income](index=2&type=section&id=Operating%20Expenses%20and%20Income_Q4) Q4 FY25 operating expenses rose to **$15.6 million**, resulting in GAAP operating income of **$0.6 million** and non-GAAP of **$0.8 million** Q4 FY25 Operating Performance (in thousands) | Metric | May 31, 2025 | June 1, 2024 | | :-------------------------------- | :----------- | :----------- | | Operating Expenses | $15,600 | $14,800 | | Loss on disposal of assets | $20 | $0 | | GAAP Operating Income (Loss) | $631 | ($114) | | Non-GAAP Operating Income (Loss) | $789 | ($114) | - Increase in operating expenses resulted from higher employee compensation expenses, partially offset by lower R&D expenses[7](index=7&type=chunk) - Loss on disposal of assets of **$0.2 million** resulted from a closing adjustment from the sale of Healthcare assets[7](index=7&type=chunk) - Other income, including interest and foreign exchange, was **$1.3 million**, compared to other expense of less than **$0.1 million** in the prior year[8](index=8&type=chunk) [Net Income and EPS](index=2&type=section&id=Net%20Income%20and%20EPS_Q4) Q4 FY25 GAAP net income reached **$1.1 million** (EPS **$0.08**), with non-GAAP net income at **$1.8 million** (EPS **$0.12**) Q4 FY25 Net Income and EPS (in thousands, except per share) | Metric | May 31, 2025 | June 1, 2024 | | :----------------------------------- | :----------- | :----------- | | GAAP Net Income (Loss) | $1,075 | ($119) | | Non-GAAP Net Income | $1,809 | $280 | | GAAP Diluted EPS | $0.08 | ($0.01) | | Non-GAAP Diluted EPS | $0.12 | $0.02 | Q4 FY25 Income Tax Provision (in thousands) | Metric | May 31, 2025 | June 1, 2024 | | :-------------------------------- | :----------- | :----------- | | GAAP Income Tax Provision (Benefit) | $889 | ($20) | | Non-GAAP Income Tax Provision (Benefit) | $313 | ($419) | [EBITDA and Adjusted EBITDA](index=2&type=section&id=EBITDA%20and%20Adjusted%20EBITDA_Q4) Q4 FY25 EBITDA was **$2.9 million**, with Adjusted EBITDA reaching **$3.1 million**, significantly up from **$1.0 million** prior year Q4 FY25 EBITDA and Adjusted EBITDA (in thousands) | Metric | May 31, 2025 | June 1, 2024 | | :-------------- | :----------- | :----------- | | EBITDA | $2,929 | $950 | | Adjusted EBITDA | $3,087 | $950 | [Financial Position](index=3&type=section&id=Financial%20Position_Q4) Richardson Electronics ended Q4 FY25 with **$35.9 million** in cash, with **$0.8 million** in capital expenditures and dividend payments Q4 FY25 Cash and Capital Expenditures (in thousands) | Metric | May 31, 2025 | March 1, 2025 | June 1, 2024 | | :-------------------- | :----------- | :------------ | :----------- | | Cash and cash equivalents | $35,901 | $36,700 | $24,263 | | Capital expenditures | $800 | N/A | $1,000 | - Cash used during the fourth quarter primarily related to the payment of dividends[12](index=12&type=chunk) - Capital expenditures were mainly for manufacturing business, facilities improvements, and IT systems[12](index=12&type=chunk) [Full Fiscal Year 2025 Financial Performance](index=3&type=section&id=Full%20Fiscal%20Year%202025%20Financial%20Performance) FY25 net sales grew **6.3%**, led by GES, with improved gross profit and a non-GAAP operating income despite a GAAP loss [Net Sales by Segment](index=3&type=section&id=Net%20Sales%20by%20Segment_FY25) FY25 net sales grew **6.3%** to **$208.9 million**, led by **23.6%** GES growth, despite Healthcare asset divestiture FY25 Net Sales by Strategic Business Unit (SBU) | SBU | May 31, 2025 (in thousands) | June 1, 2024 (in thousands) | % Change YoY | | :---- | :-------------------------- | :-------------------------- | :----------- | | PMT | $137,752 | $128,697 | 7.0% | | GES | $28,719 | $23,233 | 23.6% | | Canvys | $33,145 | $32,444 | 2.2% | | Healthcare | $9,293 | $12,086 | -23.1% | | **Total** | **$208,909** | **$196,460** | **6.3%** | [Gross Profit and Operating Expenses](index=3&type=section&id=Gross%20Profit%20and%20Operating%20Expenses_FY25) FY25 gross profit rose to **$64.8 million** (margin **31.0%**), while operating expenses increased to **$62.2 million** FY25 Gross Profit and Operating Expenses (in thousands) | Metric | May 31, 2025 | June 1, 2024 | | :-------------------------- | :----------- | :----------- | | Gross Profit | $64,800 | $59,966 | | Gross Margin (% of net sales) | 31.0% | 30.5% | | Operating Expenses | $62,173 | $59,548 | - Increase in operating expenses resulted from higher employee compensation expenses, partially offset by lower R&D expenses[14](index=14&type=chunk) [Operating Income (Loss)](index=3&type=section&id=Operating%20Income%20(Loss)_FY25) FY25 GAAP operating loss was **$2.5 million** due to a **$5.1 million** asset disposal loss, but non-GAAP operating income was **$2.6 million** FY25 Operating Performance (in thousands) | Metric | May 31, 2025 | June 1, 2024 | | :-------------------------------- | :----------- | :----------- | | Loss on disposal of assets | $5,074 | $0 | | GAAP Operating Income (Loss) | ($2,463) | $348 | | Non-GAAP Operating Income (Loss) | $2,611 | $348 | - Other income for fiscal 2025, including interest income and foreign exchange, was **$0.9 million**, compared to other expense of **$0.2 million** in fiscal 2024[15](index=15&type=chunk) [Net Income (Loss) and EPS](index=3&type=section&id=Net%20Income%20(Loss)%20and%20EPS_FY25) FY25 GAAP net loss was **$1.1 million** (EPS **$0.08**), while non-GAAP net income reached **$3.2 million** (EPS **$0.22**) FY25 Net Income and EPS (in thousands, except per share) | Metric | May 31, 2025 | June 1, 2024 | | :----------------------------------- | :----------- | :----------- | | GAAP Net Income (Loss) | ($1,143) | $61 | | Non-GAAP Net Income | $3,229 | $460 | | GAAP Diluted EPS | ($0.08) | $0.00 | | Non-GAAP Diluted EPS | $0.22 | $0.03 | FY25 Income Tax Provision (Benefit) (in thousands) | Metric | May 31, 2025 | June 1, 2024 | | :-------------------------------- | :----------- | :----------- | | GAAP Income Tax Provision (Benefit) | ($388) | $96 | | Non-GAAP Income Tax Provision (Benefit) | $314 | ($303) | [EBITDA and Adjusted EBITDA](index=3&type=section&id=EBITDA%20and%20Adjusted%20EBITDA_FY25) FY25 EBITDA was **$2.5 million**, with Adjusted EBITDA significantly increasing to **$7.5 million** from **$4.5 million** FY25 EBITDA and Adjusted EBITDA (in thousands) | Metric | May 31, 2025 | June 1, 2024 | | :-------------- | :----------- | :----------- | | EBITDA | $2,471 | $4,464 | | Adjusted EBITDA | $7,545 | $4,464 | [Dividend Declaration](index=3&type=section&id=Dividend%20Declaration) The Board declared a quarterly cash dividend of **$0.06** per common share and **$0.054** per Class B share, payable August 27, 2025 [Quarterly Cash Dividend](index=3&type=section&id=Quarterly%20Cash%20Dividend) The Board declared a quarterly cash dividend of **$0.06** per common share and **$0.054** per Class B share, payable August 27, 2025 - A **$0.06** quarterly cash dividend per share was declared for common stock[19](index=19&type=chunk) - A **$0.054** cash dividend per share was declared for Class B common stock[19](index=19&type=chunk) - The dividend is payable on August 27, 2025, to stockholders of record as of August 8, 2025[19](index=19&type=chunk) [Non-GAAP Financial Measures Reconciliation](index=4&type=section&id=Non-GAAP%20Financial%20Measures%20Reconciliation) This section reconciles GAAP to non-GAAP financial measures, excluding one-time charges for a clearer view of core performance [Non-GAAP Operating Income](index=4&type=section&id=Non-GAAP%20Operating%20Income) Non-GAAP operating income adjusts GAAP by excluding a one-time loss on Healthcare asset sales for clearer operational view Non-GAAP Operating Income Reconciliation (in thousands) | Metric | Three Months Ended May 31, 2025 | Three Months Ended June 1, 2024 | Twelve Months Ended May 31, 2025 | Twelve Months Ended June 1, 2024 | | :------------------------------------ | :------------------------------ | :------------------------------ | :------------------------------- | :------------------------------- | | Income (loss) from operations | $631 | ($114) | ($2,463) | $348 | | Loss on disposal of healthcare assets and other charges | $158 | — | $5,074 | — | | **Non-GAAP operating income (loss)** | **$789** | **($114)** | **$2,611** | **$348** | [Non-GAAP Income Before Taxes](index=4&type=section&id=Non-GAAP%20Income%20Before%20Taxes) Non-GAAP income before taxes excludes the one-time loss on Healthcare asset sales, providing a normalized pre-tax view Non-GAAP Income Before Taxes Reconciliation (in thousands) | Metric | Three Months Ended May 31, 2025 | Three Months Ended June 1, 2024 | Twelve Months Ended May 31, 2025 | Twelve Months Ended June 1, 2024 | | :------------------------------------ | :------------------------------ | :------------------------------ | :------------------------------- | :------------------------------- | | Income (loss) before income taxes | $1,964 | ($139) | ($1,531) | $157 | | Loss on disposal of healthcare assets and other charges | $158 | — | $5,074 | — | | **Non-GAAP income (loss) before taxes** | **$2,122** | **($139)** | **$3,543** | **$157** | [Non-GAAP Income Tax Provision (Benefit)](index=5&type=section&id=Non-GAAP%20Income%20Tax%20Provision%20(Benefit)) Non-GAAP income tax adjusts GAAP by excluding asset sale loss, R&D credit, and valuation allowance for representative tax expense Non-GAAP Income Tax Provision (Benefit) Reconciliation (in thousands) | Metric | Three Months Ended May 31, 2025 | Three Months Ended June 1, 2024 | Twelve Months Ended May 31, 2025 | Twelve Months Ended June 1, 2024 | | :------------------------------------ | :------------------------------ | :------------------------------ | :------------------------------- | :------------------------------- | | Income tax provision (benefit) | $889 | ($20) | ($388) | $96 | | Loss on disposal of healthcare assets and other charges | $41 | — | $1,319 | — | | Prior years' research and development credit | — | $462 | — | $462 | | Valuation allowance adjustment | ($617) | ($861) | ($617) | ($861) | | **Non-GAAP income tax provision (benefit)** | **$313** | **($419)** | **$314** | **($303)** | [Non-GAAP Net Income](index=5&type=section&id=Non-GAAP%20Net%20Income) Non-GAAP net income clarifies core profitability by excluding asset sale loss, R&D credit, and state tax valuation adjustments Non-GAAP Net Income Reconciliation (in thousands) | Metric | Three Months Ended May 31, 2025 | Three Months Ended June 1, 2024 | Twelve Months Ended May 31, 2025 | Twelve Months Ended June 1, 2024 | | :------------------------------------ | :------------------------------ | :------------------------------ | :------------------------------- | :------------------------------- | | Net income (loss) | $1,075 | ($119) | ($1,143) | $61 | | Loss on disposal of healthcare assets and other charges | $117 | — | $3,755 | — | | Prior years' research and development credit | — | ($462) | — | ($462) | | Valuation allowance adjustment | $617 | $861 | $617 | $861 | | **Non-GAAP net income** | **$1,809** | **$280** | **$3,229** | **$460** | [Non-GAAP Earnings Per Common Share (Diluted)](index=6&type=section&id=Non-GAAP%20Earnings%20Per%20Common%20Share%20(Diluted)) Non-GAAP diluted EPS adjusts GAAP by excluding asset sale loss and valuation allowance for a normalized per-share metric Non-GAAP Earnings Per Common Share (Diluted) Reconciliation | Metric | Three Months Ended May 31, 2025 | Three Months Ended June 1, 2024 | Twelve Months Ended May 31, 2025 | Twelve Months Ended June 1, 2024 | | :------------------------------------ | :------------------------------ | :------------------------------ | :------------------------------- | :------------------------------- | | Net income (loss) per share (diluted) | $0.08 | ($0.01) | ($0.08) | $0.00 | | Loss on disposal of healthcare assets and other charges | — | — | $0.26 | — | | Valuation allowance adjustment and prior years research and development credit | $0.04 | $0.03 | $0.04 | $0.03 | | **Non-GAAP net income per share (diluted)** | **$0.12** | **$0.02** | **$0.22** | **$0.03** | [EBITDA and Adjusted EBITDA](index=6&type=section&id=EBITDA%20and%20Adjusted%20EBITDA_NonGAAP) EBITDA is net income (loss) plus tax, depreciation, and amortization; Adjusted EBITDA further excludes the Healthcare asset sale loss EBITDA and Adjusted EBITDA Reconciliation (in thousands) | Metric | Three Months Ended May 31, 2025 | Three Months Ended June 1, 2024 | Twelve Months Ended May 31, 2025 | Twelve Months Ended June 1, 2024 | | :-------------------------- | :------------------------------ | :------------------------------ | :------------------------------- | :------------------------------- | | Net income (loss) | $1,075 | ($119) | ($1,143) | $61 | | Income tax provision (benefit) | $889 | ($20) | ($388) | $96 | | Depreciation & amortization | $965 | $1,089 | $4,002 | $4,307 | | **EBITDA** | **$2,929** | **$950** | **$2,471** | **$4,464** | | Disposal of healthcare assets | $158 | — | $5,074 | — | | **Adjusted EBITDA** | **$3,087** | **$950** | **$7,545** | **$4,464** | - Management believes non-GAAP measures provide useful information by excluding items not indicative of ongoing results, such as the one-time loss on the sale of Healthcare assets[23](index=23&type=chunk)[24](index=24&type=chunk) [Consolidated Financial Statements](index=8&type=section&id=Consolidated%20Financial%20Statements) Consolidated statements show FY25 asset growth, increased operating cash flow, and a shift to a GAAP net loss due to asset disposal [Consolidated Balance Sheets](index=8&type=section&id=Consolidated%20Balance%20Sheets) Total assets reached **$195.8 million** as of May 31, 2025, with increased cash and accounts payable, and decreased inventories Consolidated Balance Sheets (in thousands) | Asset/Liability/Equity | May 31, 2025 | June 1, 2024 | | :------------------------------------ | :----------- | :----------- | | **Assets:** | | | | Cash and cash equivalents | $35,901 | $24,263 | | Accounts receivable, net | $24,117 | $24,845 | | Inventories, net | $102,799 | $110,149 | | Total current assets | $166,326 | $161,654 | | Property, plant and equipment, net | $17,916 | $20,681 | | Total non-current assets | $29,509 | $30,791 | | **Total assets** | **$195,835** | **$192,445** | | **Liabilities:** | | | | Accounts payable | $21,339 | $15,458 | | Accrued liabilities | $14,276 | $15,404 | | Total current liabilities | $36,786 | $32,031 | | Total non-current liabilities | $2,390 | $2,462 | | **Total liabilities** | **$39,176** | **$34,493** | | **Stockholders' Equity:** | | | | Total stockholders' equity | $156,659 | $157,952 | | **Total liabilities and stockholders' equity** | **$195,835** | **$192,445** | [Consolidated Statements of Comprehensive Income (Loss)](index=9&type=section&id=Consolidated%20Statements%20of%20Comprehensive%20Income%20(Loss)) Consolidated statements show a shift from FY24 net income to a FY25 net loss of **$1.1 million**, influenced by asset disposal Consolidated Statements of Comprehensive Income (Loss) (in thousands) | Metric | Three Months Ended May 31, 2025 | Three Months Ended June 1, 2024 | Twelve Months Ended May 31, 2025 | Twelve Months Ended June 1, 2024 | | :------------------------------------ | :------------------------------ | :------------------------------ | :------------------------------- | :------------------------------- | | Net sales | $51,889 | $47,374 | $208,909 | $196,460 | | Gross profit | $16,375 | $14,724 | $64,800 | $59,966 | | Selling, general and administrative expenses | $15,566 | $14,838 | $62,173 | $59,548 | | Loss on disposal of healthcare assets and other charges | $158 | — | $5,074 | — | | Operating income (loss) | $631 | ($114) | ($2,463) | $348 | | Net income (loss) | $1,075 | ($119) | ($1,143) | $61 | | Comprehensive income (loss) | $4,279 | ($355) | $247 | $210 | | Net income (loss) per share (Diluted) | $0.08 | ($0.01) | ($0.08) | $0.00 | [Consolidated Statements of Cash Flows](index=10&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) FY25 operating cash flow increased to **$10.6 million**, investing activities generated **$4.0 million**, and financing used **$3.2 million** Consolidated Statements of Cash Flows (in thousands) | Cash Flow Activity | Fiscal Year Ended May 31, 2025 | Fiscal Year Ended June 1, 2024 | | :------------------------------------ | :----------------------------- | :----------------------------- | | Net (loss) income | ($1,143) | $61 | | Depreciation and amortization | $4,002 | $4,307 | | Loss on disposal of healthcare assets and other charges | $5,074 | — | | Net cash provided by operating activities | $10,552 | $6,524 | | Capital expenditures | ($2,811) | ($4,041) | | Proceeds from disposal of healthcare assets | $6,827 | — | | Net cash provided by (used in) investing activities | $4,023 | ($4,041) | | Cash dividends paid | ($3,407) | ($3,376) | | Net cash used in financing activities | ($3,246) | ($2,905) | | Increase (decrease) in cash and cash equivalents | $11,638 | ($718) | | Cash and cash equivalents at end of period | $35,901 | $24,263 | [Additional Information](index=7&type=section&id=Additional%20Information) This section provides conference call details and important disclaimers regarding forward-looking statements and associated risks [Conference Call Information](index=7&type=section&id=Conference%20Call%20Information) A conference call to discuss Q4 and FY25 results is scheduled for July 24, 2025, at 9:00 a.m. Central Time - Conference call to discuss Q4 and FY25 results scheduled for Thursday, July 24, 2025, at 9:00 a.m. Central Time[26](index=26&type=chunk) - A replay of the call will be available for seven days starting July 25, 2025, at 1:00 p.m. Central Time[27](index=27&type=chunk) [Forward-Looking Statements](index=7&type=section&id=Forward-Looking%20Statements) This release contains forward-looking statements subject to SEC-defined risks, with no obligation to update, advising Form 10-K review - The release includes forward-looking statements as defined by the SEC, which involve risks and uncertainties[28](index=28&type=chunk) - Readers are advised to refer to Item 1A, 'Risk Factors' in the Company's Annual Report on Form 10-K for a discussion of such risks[28](index=28&type=chunk) - The Company assumes no responsibility to update forward-looking statements[28](index=28&type=chunk)

Core Insights - Richardson Electronics, Ltd. reported a 9.5% increase in net sales for Q4 FY25, reaching $51.9 million, marking the fourth consecutive quarter of year-over-year growth [3][4] - The company achieved a 6.3% increase in annual net sales for FY25, totaling $208.9 million, driven by a significant 23.6% growth in Green Energy Solutions (GES) [14][2] - The Board of Directors declared a quarterly cash dividend of $0.06 per share [21] Financial Performance - Q4 FY25 non-GAAP operating income was $0.8 million, compared to an operating loss of $0.1 million in the same quarter of the previous year [8][11] - Gross margin for Q4 FY25 improved to 31.6%, up from 31.1% in Q4 FY24, with notable increases in the Power and Microwave Technologies Group (PMT) and GES [6][45] - Operating expenses rose to $15.6 million in Q4 FY25, up from $14.8 million in Q4 FY24, primarily due to higher employee compensation [7][15] Segment Performance - The PMT segment saw a 17.8% increase in sales, contributing $5.4 million to the growth, driven by demand from semiconductor wafer fab customers [4][44] - GES sales increased by 14.1%, attributed to higher sales of wind turbine battery modules [4][44] - Canvys sales grew by 9.1%, reflecting improved market conditions in Europe, while Healthcare sales decreased significantly by 67.7% due to the sale of most of its assets [4][14] Backlog and Cash Flow - The backlog at the end of Q4 FY25 was stable at $134.2 million, slightly up from $134.1 million in the previous quarter [5] - The company reported positive operating cash flow for the fifth consecutive quarter, indicating strong operational efficiency [2][13] Annual Overview - For FY25, net income was reported at $1.1 million, with non-GAAP net income at $3.2 million, contrasting with a net income of $0.1 million in FY24 [18][11] - EBITDA for FY25 was $2.5 million, with adjusted EBITDA at $7.5 million, reflecting improved operational performance [19][12]