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]

Core Points - Richardson Electronics, Ltd. plans to release its financial results for the second quarter ended November 30, 2024, on January 7, 2025 [1] - A conference call will be held on January 8, 2025, at 9:00 a.m. Central Time to discuss the financial results, featuring the Chairman and CEO, Edward J. Richardson, and CFO, Robert J. Ben [2] - Participants are encouraged to register for the call in advance and a replay will be available for seven days after the event [3] Company Overview - Richardson Electronics, Ltd. is a global manufacturer specializing in engineered solutions, green energy products, power grid and microwave tubes, and related consumables [5] - Approximately 50% of the company's products are manufactured in LaFox, Illinois, Marlborough, Massachusetts, or Donaueschingen, Germany, or by manufacturing partners worldwide [5] - The company serves various markets including alternative energy, healthcare, aviation, broadcast, communications, industrial, marine, medical, military, scientific, and semiconductor [5] - The company's strategy focuses on providing specialized technical expertise and engineered solutions based on core engineering and manufacturing capabilities [5]

Core Insights - Richardson Electronics, Ltd. has secured two multi-million dollar production contracts with major wind farm operators in North America for its patented ultracapacitor pitch energy modules (PEMs) and related products, with shipments expected in 2025 [1][2][4] Company Overview - Richardson Electronics is a global provider of engineered solutions, focusing on renewable energy and power management applications, with over 60% of its products manufactured in LaFox, Illinois, Marlborough, Massachusetts, or Donaueschingen, Germany [5] - The company serves various markets including alternative energy, healthcare, aviation, and semiconductor industries, emphasizing specialized technical expertise and engineered solutions [5][7] Product Details - The ULTRA3000® units provided by Richardson are designed as a drop-in replacement for lead-acid batteries in electric pitch systems of wind turbines, enhancing energy management for blade angle adjustments [3] - The ULTRA3000® offers a longer lifespan and reduced maintenance needs compared to traditional lead-acid batteries, thereby lowering environmental impact [3] Strategic Focus - The contracts align with Richardson Electronics' strategy to deliver innovative solutions and exceptional value to wind turbine customers, reinforcing its position as an industry leader [2][4] - The Green Energy Solutions division of Richardson focuses on products for energy storage and power management applications, including wind, solar, and electric vehicles [7]

Financial Performance - Net sales for the first quarter of fiscal 2025 were $53.7 million, a 2.2% increase from $52.6 million in the first quarter of fiscal 2024[69]. - Gross margin decreased to 30.6% in the first quarter of fiscal 2025, down from 32.8% in the first quarter of fiscal 2024[72]. - PMT segment net sales decreased by 4.3% to $34.2 million, while GES segment net sales increased by 84.0% to $8.1 million[70]. - Canvys segment net sales decreased by 22.8% to $7.6 million, and Healthcare segment net sales increased by 48.7% to $3.8 million[70]. - Consolidated gross profit decreased to $16.4 million in the first quarter of fiscal 2025 from $17.3 million in the first quarter of fiscal 2024[72]. - Net income for Q1 fiscal 2025 was $0.6 million, down from $1.2 million in Q1 fiscal 2024, representing a decrease of 50%[82]. Expenses and Income - Selling, general and administrative expenses were $16.1 million, representing 30.0% of net sales, unchanged from the previous year[77]. - Other income increased to $0.3 million in the first quarter of fiscal 2025, compared to $0.1 million in the same period of fiscal 2024[78]. - The effective income tax rate for the first quarter of fiscal 2025 was 9.0%, down from 23.7% in the first quarter of fiscal 2024[79]. Cash Flow and Liquidity - Cash and cash equivalents were $23.0 million as of August 31, 2024, compared to $24.3 million on June 1, 2024, indicating a decrease of 5.4%[83][84]. - Cash flows from operating activities generated $0.4 million in Q1 fiscal 2025, a decline from $1.0 million in Q1 fiscal 2024, reflecting a decrease of 60%[87][88]. - The company utilized $1.0 million from a revolving credit facility in Q1 fiscal 2025, which was fully repaid during the same period[86]. - Cash used in investing activities was $0.9 million in Q1 fiscal 2025, primarily for capital expenditures related to IT systems and LaFox manufacturing[89]. - Cash used in financing activities was $0.9 million in Q1 fiscal 2025, mainly due to dividend payments to stockholders[90]. - Changes in operating assets and liabilities used $1.9 million in cash during Q1 fiscal 2025, driven by a $5.9 million increase in accounts receivable[87]. - The company believes existing liquidity sources will meet capital requirements and working capital needs for the next twelve months[85]. Regulatory and Tax Matters - The company recorded a liability of $0.3 million for uncertain tax positions as of August 31, 2024, up from $0.1 million on June 1, 2024[81]. - The company is under examination in Germany for fiscal years 2019 to 2022, with no current open audits in the U.S.[80]. Challenges - The decrease in gross margin was primarily due to unfavorable product mix and manufacturing under absorption in PMT[72]. - The company continues to face challenges from tariffs on products imported from China, which may impact sales and gross margins[62].

Financial Data and Key Metrics Changes - Consolidated net sales for Q1 FY 2025 were $53.7 million, a 2.2% increase from $52.6 million in Q1 FY 2024, despite a reduction in weeks from 14 to 13 [7][8] - Gross margin decreased to 30.6% from 32.8% year-over-year, primarily due to product mix and under-absorption in manufacturing [8][9] - Net income for Q1 FY 2025 was $0.6 million, or $0.04 per diluted share, down from $1.2 million, or $0.09 per diluted share in the prior year [9][10] Business Line Data and Key Metrics Changes - Green Energy Solutions (GES) sales grew 84% to $8.1 million, driven by new programs and products [13][15] - Healthcare division reported sales of $3.8 million, a 48.8% increase compared to the same quarter last year, with a notable 50.6% increase in CT tube business [21][22] - Power and Microwave Technologies (PMT) sales decreased by 4.3% to $34.2 million, with gross margin declining due to product mix [8][16] Market Data and Key Metrics Changes - Canvys net sales decreased 22.8% to $7.6 million, attributed to lower sales in North American and European markets [24] - The backlog for GES and PMT combined remains strong at over $97 million, indicating future growth potential [17] Company Strategy and Development Direction - The company is focused on diversifying its business and expanding its global technology partnerships to enhance growth [5][18] - New product launches in the green energy sector are anticipated to drive higher manufacturing demand and improve gross margins [4][29] - The company aims to leverage engineered solutions to support global energy transformation initiatives, aligning with increasing demand for renewable energy [29][30] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about demand recovery in key business areas despite global economic uncertainties [5][30] - The semiconductor wafer fabrication market is expected to grow, providing opportunities for increased revenue [30] - Management remains committed to maintaining a healthy balance sheet while investing in long-term growth strategies [30] Other Important Information - Cash and cash equivalents at the end of Q1 FY 2025 were $23.0 million, with no outstanding debt [10] - The company declared a regular quarterly cash dividend of $0.06 per common share for Q2 FY 2025 [10] Q&A Session Summary Question: Inquiry about new program wins and legacy program wins driving GES sales - Management highlighted large orders for ULTRA3000 used in wind turbine repowering programs as significant new wins [33] Question: Feedback on the recent trade show in Europe - The trade show confirmed high demand for ULTRA3000 products in Europe, with ongoing discussions for beta testing with potential customers [35] Question: Progress on the system in India - The program in India is progressing well, with expectations for production orders to start soon [39] Question: Inventory management and expectations - Management indicated that inventory levels are being carefully managed, with some growth expected in green energy products [41][44] Question: Cash flow and potential stock repurchase - Management acknowledged the potential for stock repurchase but emphasized the need for cash to support growth in the semiconductor wafer fab business [45][46]

Company Performance - Richardson Electronics reported quarterly earnings of $0.04 per share, exceeding the Zacks Consensus Estimate of a loss of $0.01 per share, compared to earnings of $0.09 per share a year ago [1] - The earnings surprise for this quarter was 500%, following a previous quarter where the company posted earnings of $0.02 against an expected loss of $0.05, resulting in a surprise of 140% [2] - The company achieved revenues of $53.73 million for the quarter ended August 2024, surpassing the Zacks Consensus Estimate by 8.66%, compared to revenues of $52.58 million in the same quarter last year [3] Market Performance - Richardson Electronics shares have declined approximately 6.4% since the beginning of the year, while the S&P 500 has gained 20.6% [4] - The current consensus EPS estimate for the upcoming quarter is $0.08 on revenues of $52.31 million, and for the current fiscal year, it is $0.44 on revenues of $220 million [8] Industry Outlook - The Electronics - Parts Distribution industry, to which Richardson Electronics belongs, is currently ranked in the bottom 25% of over 250 Zacks industries, indicating potential challenges ahead [9] - The performance of Richardson Electronics may be influenced by the overall outlook for the industry, as research indicates that the top 50% of Zacks-ranked industries outperform the bottom 50% by more than 2 to 1 [9]

Financial Performance - Q1 FY25 net sales were $53.7 million, a 2.2% increase from $52.6 million in Q1 FY24[3] - Net sales for the three months ended August 31, 2024, were $53,725,000, representing a 2.2% increase from $52,581,000 for the same period in 2023[16] - GES sales increased by $3.7 million, or 84.0% year-over-year, driven by electric locomotive and wind turbine battery module sales[2] - Healthcare sales rose by $1.2 million, or 48.7% year-over-year, due to higher demand for CT tubes and parts[3] - The PMT segment reported net sales of $34,202,000, a decrease of 4.3% from $35,744,000 in the previous year[19] - The GES segment saw a significant increase in net sales, rising 84.0% to $8,086,000 from $4,394,000 year-over-year[19] - The Healthcare segment experienced a 48.7% increase in net sales, reaching $3,799,000 compared to $2,554,000 in the prior year[19] Profitability - Gross margin for Q1 FY25 was 30.6%, down from 32.8% in Q1 FY24[5] - Gross profit decreased to $16,426,000, which is 30.6% of net sales, down from $17,264,000 or 32.8% of net sales in the prior year[20] - Operating income was $0.3 million, compared to $1.5 million in the prior year's first quarter[6] - Operating income for the three months ended August 31, 2024, was $316,000, a significant decrease from $1,472,000 in the same period last year[16] - Net income for Q1 FY25 was $0.6 million, down from $1.2 million in Q1 FY24[6] - Net income for the three months ended August 31, 2024, was $590,000, a decline of 52.1% compared to $1,227,000 in the same period last year[18] - EBITDA for the three months ended August 31, 2024, was $1,692,000, down from $2,606,000 in the prior year[21] Cash and Dividends - Cash and cash equivalents at the end of Q1 FY25 were $23.0 million, down from $24.3 million at the end of Q4 FY24[7] - Cash and cash equivalents at the end of the period were $23,035,000, down from $24,124,000 at the end of the previous year[18] - The Board declared a quarterly cash dividend of $0.06 per share, payable on November 27, 2024[8] Backlog and Foreign Currency - Backlog totaled $137.4 million at the end of Q1 FY25, down from $147.8 million at the end of Q4 FY24[4] - The company reported a foreign currency translation gain of $636,000 for the period, compared to a loss of $41,000 in the previous year[16]

Richardson Electronics, Ltd. (NASDAQ:RELL) Q4 2024 Earnings Conference Call July 25, 2024 10:00 AM ET Company Participants Edward Richardson - CEO Robert Ben - CFO Gregory Peloquin - GM, Power & Microwave Technologies Group, Green Energy Solutions Wendy Diddell - COO & GM for Richardson Healthcare Jens Ruppert - GM, Canvys Conference Call Participants Robert Brooks - Northland Capital Markets Anja Soderstrom - Sidoti Ross Taylor - ARS Investment Partners Chip Rewey - Rewey Asset Management Andrew Rem - Odin ...

Financial Performance - Net sales for the fourth quarter of fiscal 2024 were $47.4 million, a 19.5% decrease from $58.8 million in the prior year's fourth quarter[3]. - Fiscal 2024 net sales totaled $196.5 million, down 25.2% from $262.7 million in fiscal 2023, with significant declines in PMT (21.7%), GES (51.2%), and Canvys (17.5%) sales[6]. - The company reported a net loss of $0.1 million for the fourth quarter, compared to a net income of $4.1 million in the same quarter of fiscal 2023[5]. - Operating income for fiscal 2024 was $0.3 million, a significant decrease from $25.0 million in fiscal 2023[37]. - Net income for fiscal 2024 was $0.1 million, a significant decrease from $22.3 million in fiscal 2023[38]. - Non-GAAP net income for fiscal 2024 was $0.5 million, compared to $20.0 million in fiscal 2023, indicating a substantial decline[38]. - Net loss for the three months ended June 1, 2024, was $119 million, compared to a net income of $4,120 million for the three months ended May 27, 2023[51]. - Total net income for the twelve months ended June 1, 2024, was $61 million, compared to $22,333 million for the twelve months ended May 27, 2023[51]. - The company experienced a significant decrease in net income and non-GAAP metrics compared to the previous year, indicating potential challenges in performance[51]. Cash Flow and Assets - The company generated $7.2 million in operating cash flow during the fourth quarter, ending the year with $24.3 million in cash and cash equivalents and no debt[32]. - Cash and cash equivalents at the end of the period were $24.3 million, down from $25.0 million at the beginning of the period[48]. - The company reported a net cash provided by operating activities of $6.5 million for the year ended June 1, 2024, compared to a net cash used of $(8.2) million in the previous year[48]. - Total assets decreased from $198.0 million as of May 27, 2023, to $192.4 million as of June 1, 2024[46]. Operating Expenses and Margins - Operating expenses for fiscal 2024 were $59.5 million, slightly up from $58.7 million in fiscal 2023, driven by higher R&D and salary expenses[14]. - Gross margin for the fourth quarter improved to 31.1%, up 320 basis points year-over-year, with notable increases in PMT (31.1%), GES (25.5%), and Healthcare (32.5%) segments[11]. - Gross profit for the twelve months ended June 1, 2024, was $59.97 million, which is a decrease from $83.69 million in the previous year, reflecting a gross margin of 30.5%[50]. Backlog and Future Outlook - The backlog at the end of the fourth quarter was $147.8 million, with a sequential increase in GES backlog by $5.5 million[33]. - Management expects to return to year-over-year sales growth and higher profitability in fiscal 2025, citing early signs of improving demand in semiconductor wafer fab markets[32]. Dividends - The company declared a quarterly cash dividend of $0.06 per share[9]. - The company declared a quarterly cash dividend of $0.06 per share for common stockholders, payable on August 28, 2024[40]. Foreign Currency and Other Adjustments - The company experienced a foreign currency translation loss of $(236) thousand for the three months ended June 1, 2024[47]. - The valuation allowance adjustment for the three months ended June 1, 2024, was $(861) million, compared to $1,755 million for the three months ended May 27, 2023[51]. - The income tax provision for the three months ended June 1, 2024, was $(20) million, compared to $(2,584) million for the three months ended May 27, 2023[51]. - The prior years' R&D credit for the three months ended June 1, 2024, was $462 million, consistent with the prior year[51].