Richardson Electronics(RELL) - 2025 Q3 - Quarterly Report

Financial Performance - Net sales for the third quarter of fiscal 2025 were $53.8 million, an increase of 2.7$52.4 million in the same period of fiscal 2024[106]. - Net sales for the first nine months of fiscal 2025 were $157.0 million, reflecting a 5.3$149.1 million in the first nine months of fiscal 2024[108]. - Sales for the Power and Microwave Technologies (PMT) segment increased by 6.6% in the third quarter of fiscal 2025, primarily due to higher sales of engineered solutions for the semiconductor wafer fabrication market[107]. - The Green Energy Solutions (GES) segment saw a 26.0% increase in sales during the first nine months of fiscal 2025, driven by increased shipments of power management products[108]. - The Healthcare segment experienced a 32.3% decrease in sales during the third quarter of fiscal 2025, attributed to the sale of the majority of Healthcare assets to DirectMed[107]. Profitability and Margins - Gross margin increased to 31.0% during the third quarter of fiscal 2025, up from 29.5% in the third quarter of fiscal 2024[106]. - Consolidated gross profit increased to $16.7 million in Q3 FY2025, up from$15.4 million in Q3 FY2024, with a gross margin of 31.0% compared to 29.5%[110]. - Gross profit for the PMT segment was $10.2 million, representing 30.8$8.8 million, or 28.3%, in the same period of fiscal 2024[109]. - GES net sales decreased 19.4% to $9.3 million in Q3 FY2025, primarily due to a large order in Q3 FY2024 that did not repeat, while gross margin improved to 32.8$2.1 million in Q3 FY2025, with gross margin dropping to 15.5% from 41.6% due to manufacturing issues[118]. Expenses and Losses - Selling, general and administrative expenses were $14.5 million, or 26.9$14.4 million, or 27.6% of net sales, in the same period of fiscal 2024[106]. - Operating loss for the third quarter of fiscal 2025 was $2.7 million, compared to an operating income of$1.0 million in the third quarter of fiscal 2024[106]. - Net loss for Q3 FY2025 was $2.1 million, or$0.15 per diluted share, compared to a net income of $0.8 million in Q3 FY2024[129]. Cash Flow and Financing - Cash and cash equivalents were$36.7 million as of March 1, 2025, with $20.3 million in North America[133]. - Operating activities generated$10.5 million of cash during the first nine months of FY2025, despite a net loss of $2.2 million[139]. - The company established a$30 million revolving credit facility, with no amounts outstanding as of the end of Q3 FY2025[137]. - Cash provided by investing activities was $5.0 million during the first nine months of fiscal 2025, primarily from$7.0 million proceeds from the disposal of Healthcare assets[141]. - Cash used by financing activities was $2.4 million during the first nine months of fiscal 2025, primarily due to$2.6 million in dividend payments[144]. Accounting and Risk Management - There have been no material changes in critical accounting estimates from the previous annual report[145]. - No specific events or circumstances have been identified that would require updates to estimates, assumptions, and judgments[145]. - The company is exposed to foreign currency exchange risks, managing these through normal operating and financing activities[148]. Other Financial Metrics - Non-cash stock-based compensation expense was $1.0 million, with inventory reserve provisions of$0.5 million and depreciation and amortization expense of $3.2 million[140]. - Changes in operating assets and liabilities used$5.7 million in cash, including a $2.2 million increase in inventory and a$5.2 million decrease in accounts payable[140]. - Cash used in investing activities was $3.1 million during the first nine months of fiscal 2024, primarily for capital expenditures related to IT systems and LaFox manufacturing[142]. - Cash used by financing activities was$2.3 million during the first nine months of fiscal 2024, primarily due to $2.5 million in dividend payments[144].