Richardson Electronics(RELL) - 2025 Q2 - Quarterly Report

Financial Performance - Consolidated net sales for the second quarter of fiscal 2025 were $49.5 million, an increase of 12.1$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$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$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$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$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$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$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].