{"id":835779,"date":"2025-04-09T16:20:23","date_gmt":"2025-04-09T20:20:23","guid":{"rendered":"https:\/\/www.marketnewsdesk.com\/index.php\/richardson-electronics-reports-third-quarter-results-declares-quarterly-cash-dividend\/"},"modified":"2025-04-09T16:20:23","modified_gmt":"2025-04-09T20:20:23","slug":"richardson-electronics-reports-third-quarter-results-declares-quarterly-cash-dividend","status":"publish","type":"post","link":"https:\/\/www.marketnewsdesk.com\/index.php\/richardson-electronics-reports-third-quarter-results-declares-quarterly-cash-dividend\/","title":{"rendered":"Richardson Electronics Reports Third Quarter Results; Declares Quarterly Cash Dividend"},"content":{"rendered":"
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\n Q3 FY25 net sales increase YoY for third consecutive quarter<\/em>\n <\/p>\n

\n Richardson Electronics ended Q3 with positive operating cash flow for the fourth consecutive quarter<\/em>\n <\/p>\n

\n \u00a0Strategic asset sale of a majority of Richardson Healthcare during the quarter further strengthened the Company\u2019s balance sheet, while expected to simplify the business and improve the financial model<\/em>\n <\/p>\n

LAFOX, Ill., April 09, 2025 (GLOBE NEWSWIRE) — Richardson Electronics, Ltd. (NASDAQ: RELL) today reported financial results for its third quarter ended March 1, 2025.\u00a0The Company also announced that its Board of Directors declared a $0.06 per share quarterly cash dividend.<\/p>\n

\u201cDuring the third quarter, we experienced significant year-over-year growth across key segments. Semiconductor wafer fab sales surged by 139%, while Canvys sales increased 39.5%. We achieved positive operating cash flow for the fourth consecutive quarter and ended the quarter with no debt and $36.7 million in cash and equivalents. While our cash position was bolstered by $8.2 million from the Healthcare assets sale in Q3 FY2025, the Company also generated cash from its ongoing business. We believe our strong balance sheet is an important competitive advantage with our customers and supports our long-term strategies to pursue high ROI business opportunities,\u201d said Edward J. Richardson, Chairman, CEO, and President.<\/p>\n

Mr. Richardson added, \u201cWe are encouraged by our fiscal Q3 2025 results despite the one-time $4.9 million Healthcare charge, representing the loss on sale of assets, we are encouraged by our fiscal Q3 2025 results. Excluding this charge, our non-GAAP operating income for the quarter rose to $2.2 million, up from $1.0 million last year. Moreover, this sale marks the initial step in our strategic focus to pursue higher growth, higher margin market opportunities, particularly our Green Energy Solutions segment, while navigating an extremely fluid macro environment.\u201d<\/p>\n

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\n Third Quarter Results<\/u>
\n <\/strong>\n <\/p>\n

Net sales for the third quarter of fiscal 2025 were $53.8 million, a 2.7% increase from $52.4 million in the prior year\u2019s third quarter.<\/p>\n

Year-over-year net sales growth was due to higher sales in the Power and Microwave Technologies Group (PMT) and Canvys. PMT sales increased $2.1 million, or 6.6% from the third quarter of fiscal 2024 primarily from higher demand from the Company\u2019s semiconductor wafer fab customers. Canvys sales also increased year-over-year by $2.6 million or 39.5%, reflecting improved market conditions in North America. Healthcare sales decreased by $1.0 million, or 32.3%, from lower net sales in February 2025 after the sale of the majority of Healthcare assets. GES sales decreased $2.2 million, or 19.4%, driven by lower sales of wind turbine battery modules, which are project-based and can vary by quarter.<\/p>\n

Backlog totaled $134.1 million at the end of the third quarter of fiscal 2025 versus $142.6 million at the end of the second quarter of fiscal 2025. The sequential decrease was primarily in GES, Canvys, and Healthcare. The Company\u2019s sales pipeline remains solid; however, the timing of new orders can vary quarter-to-quarter. In addition, backlog also reflects faster turns than prior years, reflected in the simultaneous decline in inventory.<\/p>\n

Gross margin for the third quarter was 31.0% of net sales compared to 29.5% during the third quarter of fiscal 2024. GES gross margin increased to 32.8% from 26.6% due to product mix.\u00a0PMT also posted an increase in gross margin to 30.8%, compared to 28.3%, due to favorable product mix. Canvys gross margin decreased to 33.2% from 34.4% primarily due to product mix. Richardson Healthcare\u2019s gross margin declined to 15.5% from 41.6%, as a result of product mix, manufacturing under absorption and higher scrap costs.<\/p>\n

Operating expenses were $14.5 million, compared to $14.4 million in the third quarter of fiscal 2024. The slight increase in operating expenses resulted from higher employee compensation expenses, partially offset by lower R&D, and professional service expenses.<\/p>\n

Loss on disposal of assets of $4.9 million resulted from the sale of the majority of Healthcare assets to DirectMed Imaging on January 24, 2025. Included in the loss was $1.4 million in excess components not needed once the exclusive supply agreement for manufacturing ALTA tubes is completed; $1.1 million for intangible assets from the IMES purchase that are no longer needed; a $1.2 million margin loss on sales of ALTA tubes as detailed under the exclusive supply agreement; $0.5 million in ALTA related fixed assets that will no longer be needed after the exclusive supply agreement ends; and $0.7 million in other directly related costs. In future periods, Healthcare\u2019s financial results will no longer be a standalone segment and will be consolidated into the Company\u2019s PMT business unit.\u00a0<\/p>\n

Operating loss was $2.7 million and non-GAAP operating income* was $2.2 million for the third quarter of fiscal 2025, compared to an operating income of $1.0 million in the prior year\u2019s third quarter. Other expense for the third quarter of fiscal 2025, including interest income and foreign exchange, was $0.3 million, compared to other expense of less than $0.1 million in the third quarter of fiscal 2024.<\/p>\n

Income tax benefit was $1.0 million and non-GAAP income tax provision* was $0.2 million, versus an income tax provision of $0.2 million, in the prior year\u2019s third quarter.<\/p>\n

Net loss was $2.1 million and non-GAAP net income* was $1.6 million for the third quarter of fiscal 2025, compared to a net income of $0.8 million in the third quarter of fiscal 2024. Loss per common share (diluted) was $0.15 and non-GAAP earnings per common share (diluted)* were $0.11 in the third quarter of fiscal 2025, compared to earnings per common share (diluted) of $0.05 in the third quarter of fiscal 2024.<\/p>\n

EBITDA* for the third quarter of fiscal 2025 was a negative $2.1 million. EBITDA* after adjusting to exclude the loss on the sale of the majority of Healthcare assets (Adjusted EBITDA*) was $2.8 million, versus $2.1 million in the prior year\u2019s third quarter.<\/p>\n

The Company improved its solid financial position and had cash and cash equivalents of $36.7 million and $28.5 million when excluding the sale of the majority of Healthcare assets, as of March 1, 2025, versus $26.6 million as of November 30, 2024. Cash generated during the third quarter of fiscal 2025 primarily related to the sale of Healthcare assets as well as a reduction in inventory and an increase in accounts payable relating to the remaining business units. The Company invested $0.5 million during the quarter in capital expenditures primarily related to its facilities and IT systems, versus $0.4 million during last year\u2019s third quarter.<\/p>\n

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\n Financial Summary for the Nine Months Ended March 1, 2025<\/u>
\n <\/strong>\n <\/p>\n