Richardson Electronics, Ltd. (NASDAQ:RELL) Q1 2024 Earnings Call Transcript October 12, 2023 10:00 AM ET Company Participants Edward Richardson - Chairman of the Board, CEO & President Robert Ben - Chief Financial Officer Greg Peloquin - General Manager, Power & Microwave Technologies Group, Green Energy Solutions Wendy Diddell - Chief Operating Officer and General Manager for Richardson Healthcare Jens Ruppert - General Manager, Canvys Conference Call Participants Anja Soderstrom - Sidoti P. Ross Taylor - ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 2, 2023 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from To Commission File Number: 0-12906 RICHARDSON ELECTRONICS, LTD. (Exact name of registrant as specified in its charter) Delaware 36-2096643 (State or other ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 20549 (Address of principal executive offices) Registrant's telephone number, including area code: (630) 208-2200 FORM 10-K ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended May 27, 2023 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from__________ to Commission File Number: 0-12906 (Exact name of registrant as ...

Richardson Electronics, Ltd. (NASDAQ:RELL) Q4 2023 Results Conference Call July 20, 2023 10:00 AM ET Company Participants Ed Richardson - Chairman of the Board, CEO & President Robert Ben - Chief Financial Officer Wendy Diddell - Chief Operating Officer and General Manager for Richardson Healthcare Greg Peloquin - General Manager, Power & Microwave Technologies Group, Green Energy Solutions Jens Ruppert - General Manager, Canvys Conference Call Participants Michael Hughes - SGF Capital Management Anja Soder ...

Richardson Electronics, Ltd. (NASDAQ:RELL) Q3 Fiscal Year 2023 Conference Call April 6, 2023 10:00 AM ET Company Participants Edward J. Richardson - Chief Executive Officer Robert Ben - Chief Financial Officer Wendy Diddell - Chief Operating Officer and General Manager for Richardson Healthcare Greg Peloquin - General Manager of our Power & Microwave Technologies Group Jens Ruppert - General Manager of Canvys Conference Call Participants Anja Soderstrom - Sidoti P Ross Taylor - ARS Investment Partners David ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended February 25, 2023 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from To Commission File Number: 0-12906 RICHARDSON ELECTRONICS, LTD. (Exact name of registrant as specified in its charter) Delaware 36-2096643 (State or other ...

Richardson Electronics, Ltd. (NASDAQ:RELL) Q2 2023 Results Conference Call January 5, 2023 10:00 AM ET Company Participants Ed Richardson - Chairman, CEO Gregory Peloquin - EVP of Power & Microwave Technologies Group Jens Ruppert - EVP, GM of Canvys Robert Ben - CFO, CAO & Corporate Secretary Wendy Diddell - COO, Director Conference Call Participants Anja Soderstrom - Sidoti Denis Amato - Ancora Advisors Eric Crown - Richie Capital Porter Taylor - ARS Investment Partners Daniel Berner - Berner Family Fund ...

Washington, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended November 26, 2022 OR UNITED STATES SECURITIES AND EXCHANGE COMMISSION ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from To Commission File Number: 0-12906 RICHARDSON ELECTRONICS, LTD. (Exact name of registrant as specified in its charter) (State or other jurisdiction of inco ...

Financial Data and Key Metrics Changes - Net sales for Q1 FY2023 increased by 25.8% to $67.6 million compared to $53.7 million in Q1 FY2022, driven by higher sales across all business units, including the new Green Energy Solutions segment [12][20] - Gross margin improved to 34.1% in Q1 FY2023 from 30.3% in Q1 FY2022, with PMT's margin increasing to 34.3% from 30.1% and GES margin rising to 35.5% from 28.9% [16][20] - Operating income was $8.8 million or 13.0% of net sales for Q1 FY2023, compared to $2.8 million or 5.3% in the prior year [18] - Net income for Q1 FY2023 was $6.3 million or 9.4% of net sales, up from $2.6 million or 4.9% in Q1 FY2022 [20] Business Line Data and Key Metrics Changes - PMT sales increased by $4.9 million or 12.2% year-over-year, driven by strong growth in semiconductor wafer fabrication equipment [13] - GES sales surged by $5.9 million or 230.7% compared to the previous year, reflecting the fast-growing alternative energy storage market [13] - Canvys sales rose by $2.0 million or 23.4% due to strong demand in North America [14] - Richardson Healthcare sales increased by $1.0 million or 45.5%, with improvements across all product lines [14] Market Data and Key Metrics Changes - Total company backlog was $199.2 million in Q1 FY2023, down from $206.2 million at the end of FY2022 but up from $126.5 million at the end of Q1 FY2022 [15] - Canvys experienced a sequential decline in backlog, while PMT and GES backlog slightly grew [73] Company Strategy and Development Direction - The company is focusing on growth initiatives, particularly in the Green Energy Solutions segment, which aims to capitalize on market opportunities in sustainable energy [5][6] - Investments in engineering and manufacturing resources are being made to support the development of solutions for a healthier environment, including alternatives to lead-acid batteries [6][7] - The company is expanding its product line for energy storage products and plans to announce several new products in the second half of FY2023 [29][30] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the future, citing a strong backlog and the potential for significant sales and profit growth in FY2023 [10][56] - The company is addressing supply chain challenges and is focused on maintaining strong operating performance [36][56] - Management highlighted the importance of partnerships with major OEMs and the ongoing demand for power management solutions [30][36] Other Important Information - Cash investments at the end of Q1 FY2023 were $35.6 million, down from $40.5 million at the end of FY2022 [21] - Inventory increased to $89.1 million, primarily due to components and work in process for PMT and GES [22] - Capital expenditures were $1.4 million in Q1 FY2023, with expectations for higher levels in FY2023 to support growth initiatives [24] Q&A Session Summary Question: Opportunities within the new GES segment - Management discussed the significant opportunity in the wind turbine market, with a potential market size of $370 million and ongoing partnerships with major operators [61][62] Question: Electric locomotives market potential - Management indicated that they are working with ProgressRail on multiple products for electric locomotives, forecasting a $40 million to $50 million business over the next three years [66][68] Question: Demand in the wafer fab market - Management noted that demand remains strong, with no slowdown in forecasts from key customers [72] Question: Gross margin outlook for Healthcare - Management highlighted improvements in gross margin due to steady production and reduced scrap, projecting a gradual upward trend [74][106] Question: Overall growth expectations - Management expressed confidence in achieving significant revenue growth, projecting about $255 million in revenue for the year, with potential for continued growth in the coming years [109]

Part I. Financial Information [Financial Statements](index=3&type=section&id=Item%201.%20Financial%20Statements) This section presents the unaudited consolidated financial statements for Q1 FY2023, detailing significant year-over-year growth in revenue, net income, and assets [Consolidated Balance Sheets](index=3&type=section&id=Consolidated%20Balance%20Sheets) Total assets increased to $187.6 million as of August 27, 2022, primarily due to higher inventories and accounts receivable Consolidated Balance Sheet Highlights (in thousands) | Account | August 27, 2022 | May 28, 2022 | | :--- | :--- | :--- | | **Total Current Assets** | $160,838 | $153,211 | | Inventories, net | $89,080 | $80,390 | | **Total Assets** | **$187,586** | **$179,819** | | **Total Current Liabilities** | $44,331 | $41,206 | | **Total Liabilities** | **$46,922** | **$43,972** | | **Total Stockholders' Equity** | **$140,664** | **$135,847** | [Unaudited Consolidated Statements of Comprehensive Income](index=4&type=section&id=Unaudited%20Consolidated%20Statements%20of%20Comprehensive%20Income) For the three months ended August 27, 2022, net sales increased **25.8%** to **$67.6 million**, with net income rising significantly to **$6.3 million** and diluted EPS reaching **$0.45** Q1 FY2023 vs Q1 FY2022 Income Statement (in thousands, except per share data) | Metric | Three Months Ended Aug 27, 2022 | Three Months Ended Aug 28, 2021 | | :--- | :--- | :--- | | Net sales | $67,557 | $53,704 | | Gross profit | $23,027 | $16,297 | | Operating income | $8,779 | $2,828 | | Net income | $6,324 | $2,635 | | Common shares - Diluted EPS | $0.45 | $0.20 | [Unaudited Consolidated Statements of Cash Flows](index=5&type=section&id=Unaudited%20Consolidated%20Statements%20of%20Cash%20Flows) Net cash used in operating activities was **$3.2 million** for Q1 FY2023, an improvement from the prior year, despite increased inventory and accounts receivable Cash Flow Summary (in thousands) | Cash Flow Activity | Three Months Ended Aug 27, 2022 | Three Months Ended Aug 28, 2021 | | :--- | :--- | :--- | | Net cash used in operating activities | $(3,231) | $(4,873) | | Net cash used in investing activities | $(1,442) | $(837) | | Net cash provided by (used in) financing activities | $497 | $(779) | | **Decrease in cash and cash equivalents** | **$(4,862)** | **$(6,898)** | [Unaudited Consolidated Statement of Stockholders' Equity](index=6&type=section&id=Unaudited%20Consolidated%20Statement%20of%20Stockholders%27%20Equity) Total stockholders' equity increased to **$140.7 million** as of August 27, 2022, driven by net income, partially offset by foreign currency translation loss and dividends - Key changes in stockholders' equity for the quarter included a net income of **$6.3 million**, a foreign currency translation loss of **$2.3 million**, and dividend payments totaling approximately **$0.8 million**[17](index=17&type=chunk) [Notes to Unaudited Consolidated Financial Statements](index=7&type=section&id=Notes%20to%20Unaudited%20Consolidated%20Financial%20Statements) The notes detail business segments, accounting policies, and significant changes, including the creation of the Green Energy Solutions (GES) segment in Q1 FY2023 - In Q1 FY2023, the company changed its reporting structure to four segments: Power and Microwave Technologies (PMT), Green Energy Solutions (GES), Canvys, and Healthcare. The new GES segment was carved out of the existing PMT segment to focus on the green energy market[21](index=21&type=chunk)[30](index=30&type=chunk)[64](index=64&type=chunk) Net Sales by Segment (in thousands) | Segment | Q1 FY2023 | Q1 FY2022 | | :--- | :--- | :--- | | PMT | $45,354 | $40,435 | | GES | $8,511 | $2,574 | | Canvys | $10,413 | $8,441 | | Healthcare | $3,279 | $2,254 | - The effective income tax rate for Q1 FY2023 was **25.0%**, a significant increase from **5.9%** in Q1 FY2022. The change was attributed to adjustments in the valuation allowance, the absence of NOL utilization, and a shift in the geographical distribution of income[55](index=55&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A)](index=17&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses Q1 FY2023 financial performance, highlighting a **25.8%** net sales increase to **$67.6 million** and a substantial rise in net income to **$6.3 million** across all segments [Business Overview](index=17&type=section&id=Business%20Overview) Richardson Electronics is a global manufacturer of engineered solutions, restructuring in Q1 FY2023 to create a new Green Energy Solutions (GES) segment for the growing green energy market - The company's strategy is to provide specialized technical expertise and "engineered solutions" based on its core engineering and manufacturing capabilities[84](index=84&type=chunk) - A new Green Energy Solutions (GES) segment was established in Q1 FY2023 by carving it out of the Power and Microwave Technologies (PMT) segment to enhance focus on the global green energy market[87](index=87&type=chunk) [Results of Operations](index=18&type=section&id=Results%20of%20Operations) In Q1 FY2023, net sales increased **25.8%** year-over-year to **$67.6 million**, driven by broad-based growth across all segments and improved gross margins Net Sales Growth by Segment (Q1 FY23 vs Q1 FY22) | Segment | % Change | | :--- | :--- | | PMT | 12.2% | | GES | 230.7% | | Canvys | 23.4% | | Healthcare | 45.5% | | **Total** | **25.8%** | - The increase in GES sales was mainly due to growth in ULTRA3000 product sales for the wind turbine industry and to customers manufacturing synthetic diamonds[96](index=96&type=chunk)[100](index=100&type=chunk) - Consolidated gross margin increased to **34.1%** from **30.3%** YoY, primarily due to better product mix, manufacturing efficiencies in PMT and GES, and improved manufacturing absorption in Healthcare[98](index=98&type=chunk) - SG&A expenses increased to **$14.2 million** but decreased as a percentage of net sales to **21.1%** from **25.1%** in the prior-year quarter[104](index=104&type=chunk) [Liquidity, Financial Position and Capital Resources](index=20&type=section&id=Liquidity%2C%20Financial%20Position%20and%20Capital%20Resources) The company's liquidity is primarily funded by operations and cash on hand, with cash and equivalents totaling **$35.6 million**, impacted by cash used in operations for working capital - Cash, cash equivalents, and investments stood at **$35.6 million** as of August 27, 2022[110](index=110&type=chunk) - Operating activities used **$3.2 million** in cash during the quarter, largely due to a **$10.5 million** increase in inventory and a **$3.5 million** increase in accounts receivable to support sales growth[115](index=115&type=chunk) - Investing activities used **$1.4 million** for capital expenditures, primarily for IT systems and manufacturing facilities[118](index=118&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=23&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company identifies foreign currency exchange as its primary market risk due to global operations, managed through normal operating and financing activities without derivatives - The primary financial risk exposure for the company is foreign currency exchange, which is managed through normal operating and financing activities[123](index=123&type=chunk) [Controls and Procedures](index=23&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded the company's disclosure controls and procedures were effective as of August 27, 2022, with no material changes to internal control over financial reporting - Management concluded that the company's disclosure controls and procedures were effective as of the end of the reporting period[126](index=126&type=chunk) - There were no changes in internal control over financial reporting during the first quarter of fiscal 2023 that have materially affected, or are reasonably likely to materially affect, these controls[127](index=127&type=chunk) Part II. Other Information [Legal Proceedings](index=24&type=section&id=Item%201.%20Legal%20Proceedings) This section indicates there are no material legal proceedings to report for the period [Risk Factors](index=24&type=section&id=Item%201A.%20Risk%20Factors) The company states there have been no material changes to the risk factors previously disclosed in its Annual Report on Form 10-K - No material changes to risk factors were reported since the filing of the last Annual Report on Form 10-K[129](index=129&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=24&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) This section indicates there were no unregistered sales of equity securities or use of proceeds to report for the period [Other Information](index=24&type=section&id=Item%205.%20Other%20Information) This section provides the results of the annual stockholders' meeting held on October 4, 2022, where directors were elected and auditor appointment ratified - The annual meeting of stockholders was held on October 4, 2022[130](index=130&type=chunk) - Stockholders elected all seven director nominees, ratified the selection of BDO USA, LLP as the independent registered public accounting firm, and approved the compensation of the company's named executive officers[130](index=130&type=chunk)[131](index=131&type=chunk)[132](index=132&type=chunk) [Exhibits](index=25&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed with the Form 10-Q, including corporate governance documents and CEO/CFO certifications - The filing includes CEO and CFO certifications pursuant to Sections 302 and 906 of the Sarbanes-Oxley Act of 2002[134](index=134&type=chunk)