Richardson Electronics(US:RELL)2024-10-10 18:34Financial 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].