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]

Company Overview - Richardson Electronics, Ltd. is a leading global manufacturer specializing in engineered solutions, green energy products, power grid and microwave tubes, and related consumables [4] - The company serves various markets including alternative energy, healthcare, aviation, broadcast, communications, industrial, marine, medical, military, scientific, and semiconductor [4] - Approximately 50% of the company's products are manufactured in LaFox, Illinois, Marlborough, Massachusetts, or Donaueschingen, Germany, or by manufacturing partners worldwide [4] Financial Results Announcement - Richardson Electronics plans to release its financial results for the third quarter ended March 1, 2025, after the close of business on April 9, 2025 [1] - A conference call to discuss the third quarter fiscal year 2025 results will be hosted on April 10, 2025, at 9:00 a.m. Central Time by the Chairman and CEO, Edward J. Richardson, and CFO, Robert J. Ben [2] Participant Information - Participants can register for the conference call and are recommended to join 10 minutes prior to the event start [3] - A replay of the call will be available starting at 1:00 p.m. Central Time on April 11, 2025, for seven days [3] Stock Information - Richardson Electronics common stock trades on the NASDAQ Global Select Market under the ticker symbol RELL [5]

Group 1 - Richardson Electronics sold a majority of its Healthcare assets to DirectMed Imaging, with the transaction closing on January 24, 2025 [1][2] - The sale includes a 10-year global supply agreement for repaired Siemens CT X-ray tubes, and Richardson will continue manufacturing ALTA CT X-ray tubes for DirectMed for 12 to 18 months [2] - The remaining assets of Richardson Healthcare will be consolidated into the PMT reportable segment, aligning with the company's strategic priorities to support its Green Energy Solutions business [3] Group 2 - The transaction is expected to simplify Richardson Electronics' business model and allow the company to focus on profitable opportunities in higher growth markets [3] - DirectMed Imaging is a leading provider of aftermarket diagnostic imaging parts and services, with over 100,000 parts in stock [8] - DirectMed also owns LBN Medical ApS and ScanMed, expanding its capabilities in the medical imaging equipment market [9]

Core Points - Richardson Electronics has sold a majority of its Richardson Healthcare assets to DirectMed Imaging, with the transaction closing on January 24, 2025 [1][2] - The sale includes a substantial portion of the Richardson Healthcare reportable segment, along with a 10-year global supply agreement for Siemens CT X-ray tubes [2] - The remaining healthcare operations will be consolidated into the PMT reportable segment, focusing on CT X-ray tube manufacturing and repair [2][3] Company Strategy - The transaction aligns with the company's strategic priorities by reallocating assets to support the growth of its Green Energy Solutions business [3] - The CEO emphasized that the partnership with DirectMed is mutually beneficial and will simplify the business model while prioritizing profitable opportunities in higher growth markets [3] Company Overview - Richardson Electronics is a global manufacturer of engineered solutions, including green energy products and diagnostic imaging equipment [6] - The company serves various markets, including healthcare, alternative energy, and industrial sectors, with approximately 50% of its products manufactured in the U.S. and Germany [6] DirectMed Imaging Overview - DirectMed Imaging is a leading provider of aftermarket diagnostic imaging parts and services, with a large inventory of over 100,000 parts [8] - The company supports major brands like GE, Siemens, Philips, and Canon/Toshiba in the healthcare sector [8][9]

Financial Performance - Consolidated net sales for the second quarter of fiscal 2025 were $49.5 million, an increase of 12.1% compared to $44.1 million in the same period of fiscal 2024[90]. - For the first six months of fiscal 2025, consolidated net sales increased by 6.7% to $103.2 million compared to $96.7 million in the first six months of fiscal 2024[94]. - Net sales for the Power and Microwave Technologies (PMT) segment increased by 9.9% to $34.4 million in the second quarter of fiscal 2025[92]. - Green Energy Solutions (GES) segment saw a significant increase in sales of 129.0%, reaching $6.0 million in the second quarter of fiscal 2025[92]. - Healthcare segment experienced a decline in sales of 22.8%, totaling $2.3 million in the second quarter of fiscal 2025[92]. - PMT net sales increased 9.9% to $34.4 million in Q2 FY2025 from $31.3 million in Q2 FY2024, driven by higher sales of electron devices and RF components[99]. - GES net sales surged 129.0% to $6.0 million in Q2 FY2025 from $2.6 million in Q2 FY2024, primarily due to increased shipments of power management products[101]. - Canvys net sales decreased 6.0% to $6.9 million in Q2 FY2025 from $7.3 million in Q2 FY2024, attributed to lower sales in European markets[103]. - Healthcare net sales decreased 22.8% to $2.3 million in Q2 FY2025 from $2.9 million in Q2 FY2024, reflecting declines across all product lines[105]. Profitability and Expenses - Gross margin increased to 31.0% during the second quarter of fiscal 2025, up from 28.4% in the second quarter of fiscal 2024[96]. - Consolidated gross profit for the second quarter of fiscal 2025 was $15.4 million, compared to $12.5 million in the second quarter of fiscal 2024[96]. - Selling, general and administrative expenses were $16.0 million, representing 32.3% of net sales in the second quarter of fiscal 2025[90]. - SG&A expenses increased 10.4% to $16.0 million in Q2 FY2025 from $14.5 million in Q2 FY2024, mainly due to higher incentives related to sales growth[107]. - The operating loss for the second quarter of fiscal 2025 was $0.7 million, an improvement from the $2.0 million loss in the same period of fiscal 2024[90]. - Net loss for Q2 FY2025 was $0.8 million, or $0.05 per diluted share, compared to a net loss of $1.8 million, or $0.13 per diluted share in Q2 FY2024[116]. Cash Flow and Financing - Cash and cash equivalents were $26.6 million as of November 30, 2024, with no cash repatriated to the U.S. in the first six months of FY2025[120]. - Operating activities generated $5.9 million of cash during the first six months of FY2025, despite a net loss of $0.2 million[126]. - Cash used in investing activities was $1.4 million in the first six months of FY2025, primarily for capital expenditures related to IT systems and manufacturing facilities[129]. - Cash used in financing activities was $1.6 million in the first six months of fiscal 2025, primarily due to $1.7 million in dividend payments to stockholders, partially offset by $0.3 million from stock issuance[132]. - Cash used in financing activities was $1.5 million in the first six months of fiscal 2024, with similar reasons as fiscal 2025[132]. - The Company established a $30 million revolving credit facility on March 20, 2023, with no amounts outstanding as of the end of Q2 FY2025[124]. Risk Management and Accounting - The company is exposed to foreign currency exchange risks due to operations, assets, and liabilities denominated in foreign currencies[135]. - The management of market risks is conducted through normal operating and financing activities[135]. - Additional disclosures regarding market risks are available in the Annual Report on Form 10-K for the fiscal year ended June 1, 2024[136]. - There have been no material changes in critical accounting estimates from the previous fiscal year, as disclosed in the Annual Report on Form 10-K for the year ended June 1, 2024[133].

Financial Data and Key Metrics Changes - Consolidated net sales for Q2 FY 2025 increased by 12.1% to $49.5 million compared to $44.1 million in Q2 FY 2024, marking the second consecutive quarterly year-over-year increase in sales [8][9] - Gross margin improved to 31% of net sales from 28.4% in the prior year, with significant margin expansion across most business segments [9][10] - Net loss for Q2 FY 2025 was $0.8 million or $0.05 per diluted share, compared to a net loss of $1.8 million or $0.13 per diluted share in Q2 FY 2024 [11] Business Line Data and Key Metrics Changes - Green Energy Solutions (GES) sales grew by 129% to $5.9 million, significantly contributing to overall sales growth [19] - Power and Microwave Technologies (PMT) sales increased by 9.9% to $34.4 million, driven by higher sales to semiconductor wafer fab customers [9][24] - Healthcare sales declined by 22.8% to $2.3 million, reflecting lower demand across all product lines [33] Market Data and Key Metrics Changes - The backlog for GES grew by over 16% in Q2 FY 2025, indicating strong future demand [20] - Canvas sales decreased by 6.0% to $6.9 million, impacted by lower sales in European markets, particularly due to economic challenges [38] Company Strategy and Development Direction - The company is focused on a multiyear growth strategy, particularly in the green energy sector, with a strong emphasis on power management applications [22][47] - There is a commitment to expanding global technology partnerships to enhance product offerings and capture more revenue [26][27] - The company is investing in infrastructure and talent to support growth, including hiring design and field engineers [28] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the future, citing a strong backlog and numerous new product introductions [18] - The semiconductor wafer fab market is expected to see sustained growth due to rising demand driven by AI and 5G deployment [48] - Despite uncertainties in the global environment, the company remains committed to its long-term growth strategies [47] Other Important Information - Cash and cash equivalents at the end of Q2 FY 2025 were $26.6 million, up from $23.0 million at the end of Q1 FY 2025 [14] - The company declared a regular quarterly cash dividend of $0.06 per common share, to be paid in Q3 FY 2025 [15] Q&A Session Summary Question: What is the expected shipping timeframe for recent multimillion orders? - The company has already started shipping, with the balance expected to ship throughout calendar year 2025 [56] Question: Can you provide more details on new program wins? - New program wins primarily occurred with wind turbine applications, contributing to market share growth [74][78] Question: What is the outlook for SG&A expenses? - SG&A expenses are expected to increase in line with sales growth but not at the same rate as seen in Q2 [81] Question: Can you provide an update on the shipping timeline for diesel locomotive products? - Major shipments are expected at the end of Q3, with ongoing shipments throughout 2025 [91] Question: What is the current balance of Thales-related inventory? - The current balance is around $30 million, with expectations for it to deplete as products are sold [148] Question: What is the status of the healthcare business unit? - The healthcare division is still losing money but is seeing improvements in gross margin and factory absorption [126]

Financial Performance - Q2 FY25 net sales increased by 12.1% year-over-year to $49.5 million, up from $44.1 million in Q2 FY24[4] - Net sales for the three months ended November 30, 2024, were $49,491 thousand, representing a 12.1% increase compared to $44,130 thousand for the same period in 2023[31] - The PMT segment achieved net sales of $34,397 thousand for the three months ended November 30, 2024, a 9.9% increase from $31,292 thousand in the prior year[31] - The GES segment saw a significant increase in net sales, reaching $5,974 thousand, up 129.0% from $2,609 thousand in the same period last year[31] - Green Energy Solutions (GES) net sales surged by 129% year-over-year, contributing an additional $3.4 million in sales[2] Profitability and Loss - Operating loss narrowed to $0.7 million in Q2 FY25, compared to a loss of $2.0 million in Q2 FY24[10] - Net loss for Q2 FY25 was $0.8 million, an improvement from a net loss of $1.8 million in Q2 FY24, with loss per share reduced to $0.05[11] - The company reported a net loss of $751 thousand for the three months ended November 30, 2024, an improvement from a net loss of $1,797 thousand in the same period of 2023[29] - The company’s comprehensive loss for the three months ended November 30, 2024, was $(2,499) thousand, compared to $(1,166) thousand in the same period last year[29] Cash Flow and Financial Health - Positive operating cash flow for the third consecutive quarter, with cash and cash equivalents totaling $26.6 million and no debt[3] - Cash and cash equivalents at the end of the period were $26,635 thousand, an increase from $22,769 thousand at the end of the same period last year[29] Operating Metrics - Gross margin improved to 31.0% in Q2 FY25, compared to 28.4% in Q2 FY24, with GES gross margin rising to 32.0%[8] - Gross profit for the three months ended November 30, 2024, was $15,326 thousand, with a gross margin of 31.0%, up from $12,542 thousand and 28.4% in the same period last year[32] Backlog and Future Outlook - Backlog increased to $142.6 million at the end of Q2 FY25, up from $137.4 million at the end of Q1 FY25, indicating strong sales pipeline[7] - Management anticipates year-over-year sales growth and higher profitability for FY25, supported by backlog growth[3] Operating Expenses - Operating expenses increased to $16.0 million in Q2 FY25, up from $14.5 million in Q2 FY24, primarily due to higher employee compensation[9] Dividends - The Board declared a quarterly cash dividend of $0.06 per share, payable on February 26, 2025[15] Other Expenses - The company incurred total other expenses of $388 thousand for the three months ended November 30, 2024, compared to $275 thousand in the same period last year[29] Segment Performance - The healthcare segment experienced a decline in net sales, reporting $2,269 thousand, down 22.8% from $2,938 thousand in the prior year[31] EBITDA - EBITDA for the six months ended November 30, 2024, was $1,652 thousand, compared to $1,431 thousand for the same period in 2023[34]

Core Insights - Richardson Electronics, Ltd. reported a 12.1% year-over-year increase in net sales for Q2 FY25, reaching $49.5 million, marking the second consecutive quarterly increase [4][11] - The Green Energy Solutions (GES) segment saw a significant sales increase of 129% year-over-year, driven by higher sales of wind turbine battery modules [5][33] - The company ended Q2 with positive operating cash flow for the third consecutive quarter, holding $26.6 million in cash and cash equivalents with no debt [3][12] Financial Performance - Net sales for Q2 FY25 were $49.5 million, up from $44.1 million in Q2 FY24, reflecting strong performance in GES and Power and Microwave Technologies Group (PMT) [4][5] - GES sales increased by $3.4 million, or 129%, while PMT sales rose by $3.1 million, or 9.9% [2][5] - Healthcare sales declined by $0.7 million, or 22.8%, due to lower demand for CT tubes and systems [6] Profitability and Margins - Gross margin for Q2 FY25 improved to 31.0% from 28.4% in Q2 FY24, with GES gross margin increasing to 32.0% [8] - Operating expenses rose to $16.0 million from $14.5 million in the prior year, primarily due to higher employee compensation [9] - The company reported a net loss of $0.8 million for Q2 FY25, an improvement from a net loss of $1.8 million in Q2 FY24 [11] Cash Flow and Dividends - The company generated positive operating cash flow of $5.5 million in Q2 FY25, with cash and cash equivalents increasing from $23.0 million at the end of Q1 FY25 [12][3] - The Board of Directors declared a quarterly cash dividend of $0.06 per share, payable on February 26, 2025 [14] Backlog and Future Outlook - Backlog at the end of Q2 FY25 totaled $142.6 million, up from $137.4 million at the end of Q1 FY25, indicating a robust sales pipeline [7] - Management anticipates continued year-over-year sales growth and higher profitability for FY25, supported by backlog growth [3][2]

Group 1 - Richardson Electronics is a 78-year-old engineering company with multiple income streams, but none have achieved significant growth [1] - The company's highest annual revenue was $575 million in 2005, while its revenue for FY2024 was $196.46 million [1]