Richardson Electronics Reports Second Quarter Results; Declares Quarterly Cash Dividend
Rhea-AI Summary
Richardson Electronics (NASDAQ: RELL) reported Q2 FY25 results with net sales of $49.5 million, showing a 12.1% increase from $44.1 million in Q2 FY24. The growth was primarily driven by Green Energy Solutions (GES), which saw a 129% increase in sales, and the Power and Microwave Technologies Group (PMT) with a 9.9% increase.
The company maintained a strong financial position with $26.6 million in cash and no debt. Gross margin improved to 31.0% compared to 28.4% in Q2 FY24. Despite these improvements, the company reported a net loss of $0.8 million ($0.05 per share), better than the $1.8 million loss ($0.13 per share) in the prior year. The Board declared a quarterly cash dividend of $0.06 per share.
Backlog increased to $142.6 million from $137.4 million in Q1 FY25, with management expecting continued growth and higher year-over-year sales and profitability for FY25.
Positive
- Net sales increased 12.1% YoY to $49.5 million
- GES sales grew 129% YoY, adding $3.4 million
- PMT sales increased 9.9% YoY
- Gross margin improved to 31.0% from 28.4%
- Backlog grew to $142.6 million from $137.4 million sequentially
- Strong balance sheet with $26.6 million cash and no debt
Negative
- Net loss of $0.8 million in Q2 FY25
- Operating loss of $0.7 million
- Healthcare sales decreased 22.8%
- Canvys sales declined 6.0%
- Operating expenses increased to $16.0 million from $14.5 million
News Market Reaction
On the day this news was published, RELL declined 12.75%, reflecting a significant negative market reaction.
Data tracked by StockTitan Argus on the day of publication.
Q2 FY25 net sales increased
Green Energy Solutions (GES) net sales increased
Richardson Electronics ended Q2 with positive operating cash flow for the third consecutive quarter,
Management expects YoY sales growth and higher profitability for FY25
LAFOX, Ill., Jan. 07, 2025 (GLOBE NEWSWIRE) -- Richardson Electronics, Ltd. (NASDAQ: RELL) today reported financial results for its second quarter ended November 30, 2024. The Company also announced that its Board of Directors declared a
“Our second quarter results included new program wins and continued improvement in demand across our GES and PMT markets. These trends drove a
“We generated positive operating cash flow for the third straight quarter, ending the quarter with no debt and
Second Quarter Results
Net sales for the second quarter of fiscal 2025 were
Year-over-year net sales growth for the second quarter of fiscal 2025 was due to higher sales in GES and the Power and Microwave Technologies Group (PMT). GES sales increased
Sales growth for the second quarter of fiscal 2025 was partially offset by a
Backlog totaled
Gross margin for the second quarter was
Operating expenses were
Operating loss was
Income tax benefit was
Net loss for the second quarter of fiscal 2025 was
EBITDA for the second quarter of fiscal 2025 was approximately breakeven versus negative
The Company improved its solid financial position and had cash and cash equivalents of
Financial Summary for the Six Months Ended November 30, 2024
- Net sales for the first six months of fiscal 2025 were
$103.2 million , an increase of6.7% , compared to net sales of$96.7 million during the first six months of fiscal 2024. Sales increased by$1.5 million or2.3% for PMT,$7.1 million or100.8% for GES and$0.6 million or10.5% for Healthcare offset by a decrease of$2.7 million or15.7% for Canvys. - Gross profit increased to
$31.8 million during the first six months of fiscal 2025, compared to$29.8 million during the first six months of fiscal 2024. As a percentage of net sales, gross margin was30.8% of net sales during the first six months of fiscal 2025, the same as during the first six months of fiscal 2024. - Operating expenses increased to
$32.1 million for the first six months of fiscal 2025, compared to$30.3 million for the first six months of fiscal 2024. The increase in operating expenses resulted primarily from higher employee compensation expenses. - Operating loss during the first six months of fiscal 2025 was
$0.4 million , compared to operating loss of$0.5 million during the first six months of fiscal 2024. - Other expense, for the first six months of fiscal 2025, including interest income and foreign exchange, was
$0.1 million , as compared to other expense of$0.1 million in the first six months of fiscal 2024. - The income tax benefit was
$0.2 million for the first six months of fiscal 2025 compared to an income tax benefit of$0.1 million during the first six months of fiscal 2024. - Net loss for the first six months of fiscal 2025 was
$0.2 million , versus a net loss of$0.6 million during the first six months of fiscal 2024. Net loss per common share (diluted) was$0.01 for the first six months of fiscal 2025 compared to$0.04 loss per common share (diluted) for the first six months of fiscal 2024.
CASH DIVIDEND DECLARED
The Board of Directors of Richardson Electronics declared a
NON-GAAP FINANCIAL MEASURE
In addition to the results reported in accordance with generally accepted accounting principles in the United States (GAAP) included throughout this press release, the Company has provided information regarding “EBITDA” (a “non-GAAP financial measure”). This non-GAAP financial measure reflects earnings before interest, income tax, depreciation and amortization expenses. Detailed reconciliations of the non-GAAP financial measures to the most directly comparable GAAP financial measures are set forth in this press release.
Management believes that the disclosure of this non-GAAP financial measure provides useful information to investors in assessing the Company’s financial performance excluding items that are not considered by the Company to be indicative of the Company’s ongoing results. Our management uses this non-GAAP financial measure along with the most directly comparable GAAP financial measure in evaluating our financial performance and when planning, forecasting and analyzing future periods. The non-GAAP financial measure presented herein, as determined and presented by the Company, may not be comparable to related or similarly titled measures reported by other companies. The non-GAAP financial measure incorporated herein is not intended to be used as a substitute for the related GAAP measurements. The non-GAAP financial measure should be viewed in addition to, and not as an alternative for, our reported results prepared in accordance with GAAP.
CONFERENCE CALL INFORMATION
The Company will host a conference call and question-and-answer session on Wednesday, January 8, 2025, at 9:00 a.m. Central Time, to discuss its second quarter fiscal-year 2025 results.
Participants may register for the call here. While not required, it is recommended you join 10 minutes prior to the event start. A replay of the call will be available beginning at 1:00 p.m. Central Time on January 9, 2025, for seven days. Registration instructions are also on our website at www.rell.com.
In addition, the webcast link is available here.
FORWARD-LOOKING STATEMENTS
This release includes certain “forward-looking” statements as defined by the Securities and Exchange Commission. Statements in this press release regarding the Company’s business that are not historical facts represent “forward-looking” statements that involve risks and uncertainties. For a discussion of such risks and uncertainties, which could cause actual results to differ from those contained in the forward-looking statements, see Item 1A, “Risk Factors” in the Company’s Annual Report on Form 10-K filed on August 5, 2024, and other reports we file with the Securities and Exchange Commission. The Company assumes no responsibility to update the “forward-looking” statements in this release as a result of new information, future events or otherwise.
ABOUT RICHARDSON ELECTRONICS, LTD.
Richardson Electronics, Ltd. is a leading global manufacturer of engineered solutions, green energy products, power grid and microwave tubes, and related consumables; power conversion and RF and microwave components including green energy solutions; high-value replacement parts, tubes, and service training for diagnostic imaging equipment; and customized display solutions. Approximately
Richardson Electronics common stock trades on the NASDAQ Global Select Market under the ticker symbol RELL.
| Richardson Electronics, Ltd. Consolidated Balance Sheets (in thousands, except per share amounts) | ||||||||
| Unaudited | Audited | |||||||
| November 30, 2024 | June 1, 2024 | |||||||
| Assets | ||||||||
| Current assets: | ||||||||
| Cash and cash equivalents | $ | 26,635 | $ | 24,263 | ||||
| Accounts receivable, less allowance for credit losses of | 25,765 | 24,845 | ||||||
| Inventories, net | 110,687 | 110,149 | ||||||
| Prepaid expenses and other assets | 2,441 | 2,397 | ||||||
| Total current assets | 165,528 | 161,654 | ||||||
| Non-current assets: | ||||||||
| Property, plant and equipment, net | 20,166 | 20,681 | ||||||
| Intangible assets, net | 1,521 | 1,641 | ||||||
| Right of use lease assets | 2,321 | 2,760 | ||||||
| Deferred income tax assets | 5,566 | 5,500 | ||||||
| Other non-current assets | 123 | 209 | ||||||
| Total non-current assets | 29,697 | 30,791 | ||||||
| Total assets | $ | 195,225 | $ | 192,445 | ||||
| Liabilities | ||||||||
| Current liabilities: | ||||||||
| Accounts payable | $ | 19,978 | $ | 15,458 | ||||
| Accrued liabilities | 15,633 | 15,404 | ||||||
| Lease liabilities current | 1,075 | 1,169 | ||||||
| Total current liabilities | 36,686 | 32,031 | ||||||
| Non-current liabilities: | ||||||||
| Deferred income tax liabilities | 75 | 90 | ||||||
| Lease liabilities non-current | 1,246 | 1,591 | ||||||
| Other non-current liabilities | 1,027 | 781 | ||||||
| Total non-current liabilities | 2,348 | 2,462 | ||||||
| Total liabilities | 39,034 | 34,493 | ||||||
| Stockholders’ Equity | ||||||||
| Common stock, | 618 | 613 | ||||||
| Class B common stock, convertible, | 102 | 102 | ||||||
| Preferred stock, | — | — | ||||||
| Additional paid-in-capital | 73,793 | 72,744 | ||||||
| Retained earnings | 82,026 | 83,729 | ||||||
| Accumulated other comprehensive (loss) income | (348 | ) | 764 | |||||
| Total stockholders' equity | 156,191 | 157,952 | ||||||
| Total liabilities and stockholders’ equity | $ | 195,225 | $ | 192,445 | ||||
| Richardson Electronics, Ltd. Unaudited Consolidated Statements of Comprehensive (Loss) Income (in thousands, except per share amounts) | ||||||||||||||||
| Three Months Ended | Six Months Ended | |||||||||||||||
| November 30, 2024 | December 2, 2023 | November 30, 2024 | December 2, 2023 | |||||||||||||
| Net sales | $ | 49,491 | $ | 44,130 | $ | 103,216 | $ | 96,711 | ||||||||
| Cost of sales, exclusive of depreciation and amortization | 34,165 | 31,588 | 71,464 | 66,905 | ||||||||||||
| Gross profit | 15,326 | 12,542 | 31,752 | 29,806 | ||||||||||||
| Selling, general and administrative expenses, inclusive of depreciation and amortization | 15,995 | 14,488 | 32,107 | 30,280 | ||||||||||||
| (Gain) loss on disposal of assets | (2 | ) | 70 | (4 | ) | 70 | ||||||||||
| Operating loss | (667 | ) | (2,016 | ) | (351 | ) | (544 | ) | ||||||||
| Other expense (income): | ||||||||||||||||
| Interest income | (45 | ) | (86 | ) | (103 | ) | (157 | ) | ||||||||
| Foreign exchange loss | 437 | 343 | 160 | 246 | ||||||||||||
| Other, net | (4 | ) | 18 | (1 | ) | 50 | ||||||||||
| Total other expense | 388 | 275 | 56 | 139 | ||||||||||||
| Loss before income taxes | (1,055 | ) | (2,291 | ) | (407 | ) | (683 | ) | ||||||||
| Income tax benefit | (304 | ) | (494 | ) | (246 | ) | (113 | ) | ||||||||
| Net loss | (751 | ) | (1,797 | ) | (161 | ) | (570 | ) | ||||||||
| Foreign currency translation (loss) gain, net of tax | (1,748 | ) | 631 | (1,112 | ) | 590 | ||||||||||
| Comprehensive (loss) income | $ | (2,499 | ) | $ | (1,166 | ) | $ | (1,273 | ) | $ | 20 | |||||
| Net loss per share: | ||||||||||||||||
| Common shares - Basic | $ | (0.05 | ) | $ | (0.13 | ) | $ | (0.01 | ) | $ | (0.04 | ) | ||||
| Class B common shares - Basic | (0.05 | ) | (0.12 | ) | (0.01 | ) | (0.04 | ) | ||||||||
| Common shares - Diluted | (0.05 | ) | (0.13 | ) | (0.01 | ) | (0.04 | ) | ||||||||
| Class B common shares - Diluted | (0.05 | ) | (0.12 | ) | (0.01 | ) | (0.04 | ) | ||||||||
| Weighted average number of shares: | ||||||||||||||||
| Common shares – Basic | 12,315 | 12,226 | 12,258 | 12,198 | ||||||||||||
| Class B common shares – Basic | 2,049 | 2,052 | 2,049 | 2,052 | ||||||||||||
| Common shares – Diluted | 12,315 | 12,226 | 12,258 | 12,198 | ||||||||||||
| Class B common shares – Diluted | 2,049 | 2,052 | 2,049 | 2,052 | ||||||||||||
| Richardson Electronics, Ltd. Unaudited Consolidated Statements of Cash Flows (in thousands) | ||||||||||||||||
| Three Months Ended | Six Months Ended | |||||||||||||||
| November 30, 2024 | December 2, 2023 | November 30, 2024 | December 2, 2023 | |||||||||||||
| Operating activities: | ||||||||||||||||
| Net loss | $ | (751 | ) | $ | (1,797 | ) | $ | (161 | ) | $ | (570 | ) | ||||
| Adjustments to reconcile net loss to cash provided by operating activities: | ||||||||||||||||
| Unrealized foreign currency loss (gain) | 141 | (268 | ) | (241 | ) | (305 | ) | |||||||||
| Depreciation and amortization | 1,015 | 1,116 | 2,059 | 2,114 | ||||||||||||
| Inventory provisions | 84 | 192 | 223 | 277 | ||||||||||||
| Share-based compensation expense | 313 | 283 | 906 | 766 | ||||||||||||
| (Gain) loss on disposal of assets | (2 | ) | 70 | (4 | ) | 70 | ||||||||||
| Deferred income taxes | (21 | ) | 51 | (79 | ) | 46 | ||||||||||
| Change in assets and liabilities: | ||||||||||||||||
| Accounts receivable | 4,721 | 1,790 | (1,137 | ) | 6,252 | |||||||||||
| Inventories | (1,617 | ) | (3,069 | ) | (1,741 | ) | (6,220 | ) | ||||||||
| Prepaid expenses and other assets | 67 | (618 | ) | 38 | (209 | ) | ||||||||||
| Accounts payable | 500 | 1,233 | 4,664 | (1,132 | ) | |||||||||||
| Accrued liabilities | 641 | 1,502 | 546 | 378 | ||||||||||||
| Other | 374 | 315 | 804 | 348 | ||||||||||||
| Net cash provided by operating activities | 5,465 | 800 | 5,877 | 1,815 | ||||||||||||
| Investing activities: | ||||||||||||||||
| Capital expenditures | (517 | ) | (1,515 | ) | (1,443 | ) | (2,656 | ) | ||||||||
| Proceeds from sale of property, plant & equipment | — | — | 7 | — | ||||||||||||
| Net cash used in investing activities | (517 | ) | (1,515 | ) | (1,436 | ) | (2,656 | ) | ||||||||
| Financing activities: | ||||||||||||||||
| Proceeds from issuance of common stock | 163 | 15 | 307 | 342 | ||||||||||||
| Cash dividends paid on common and Class B common stock | (853 | ) | (845 | ) | (1,703 | ) | (1,688 | ) | ||||||||
| Proceeds from revolving credit facility | — | — | 1,000 | — | ||||||||||||
| Repayment of revolving credit facility | — | — | (1,000 | ) | — | |||||||||||
| Other | 3 | — | (159 | ) | (119 | ) | ||||||||||
| Net cash used in financing activities | (687 | ) | (830 | ) | (1,555 | ) | (1,465 | ) | ||||||||
| Effect of exchange rate changes on cash and cash equivalents | (661 | ) | 190 | (514 | ) | 94 | ||||||||||
| Increase (decrease) in cash and cash equivalents | 3,600 | (1,355 | ) | 2,372 | (2,212 | ) | ||||||||||
| Cash and cash equivalents at beginning of period | 23,035 | 24,124 | 24,263 | 24,981 | ||||||||||||
| Cash and cash equivalents at end of period | $ | 26,635 | $ | 22,769 | $ | 26,635 | $ | 22,769 | ||||||||
| Richardson Electronics, Ltd. Unaudited Net Sales and Gross Profit For the Second Quarter and First Six Months of Fiscal 2025 and 2024 ($ in thousands) | ||||||||||||
| By Strategic Business Unit | ||||||||||||
| Net Sales | ||||||||||||
| Three Months Ended | FY25 vs. FY24 | |||||||||||
| November 30, 2024 | December 2, 2023 | % Change | ||||||||||
| PMT | $ | 34,397 | $ | 31,292 | 9.9 | % | ||||||
| GES | 5,974 | 2,609 | 129.0 | % | ||||||||
| Canvys | 6,851 | 7,291 | -6.0 | % | ||||||||
| Healthcare | 2,269 | 2,938 | -22.8 | % | ||||||||
| Total | $ | 49,491 | $ | 44,130 | 12.1 | % | ||||||
| Six Months Ended | FY25 vs. FY24 | |||||||||||
| November 30, 2024 | December 2, 2023 | % Change | ||||||||||
| PMT | $ | 68,599 | $ | 67,036 | 2.3 | % | ||||||
| GES | 14,060 | 7,003 | 100.8 | % | ||||||||
| Canvys | 14,489 | 17,180 | -15.7 | % | ||||||||
| Healthcare | 6,068 | 5,492 | 10.5 | % | ||||||||
| Total | $ | 103,216 | $ | 96,711 | 6.7 | % | ||||||
| Gross Profit | ||||||||||||||||
| Three Months Ended | ||||||||||||||||
| November 30, 2024 | % of Net Sales | December 2, 2023 | % of Net Sales | |||||||||||||
| PMT | $ | 10,430 | 30.3 | % | $ | 8,905 | 28.5 | % | ||||||||
| GES | 1,914 | 32.0 | % | 761 | 29.2 | % | ||||||||||
| Canvys | 2,171 | 31.7 | % | 2,440 | 33.5 | % | ||||||||||
| Healthcare | 811 | 35.7 | % | 436 | 14.8 | % | ||||||||||
| Total | $ | 15,326 | 31.0 | % | $ | 12,542 | 28.4 | % | ||||||||
| Six Months Ended | ||||||||||||||||
| November 30, 2024 | % of Net Sales | December 2, 2023 | % of Net Sales | |||||||||||||
| PMT | $ | 20,632 | 30.1 | % | $ | 20,416 | 30.5 | % | ||||||||
| GES | 4,288 | 30.5 | % | 2,341 | 33.4 | % | ||||||||||
| Canvys | 4,792 | 33.1 | % | 5,805 | 33.8 | % | ||||||||||
| Healthcare | 2,040 | 33.6 | % | 1,244 | 22.7 | % | ||||||||||
| Total | $ | 31,752 | 30.8 | % | $ | 29,806 | 30.8 | % | ||||||||
| Richardson Electronics, Ltd. Unaudited Reconciliation Between GAAP and Non-GAAP Financial Measures For the Second Quarter and First Six months of Fiscal 2025 and 2024 ($ in thousands) | ||||||||
| EBITDA | ||||||||
| Three Months Ended | ||||||||
| November 30, 2024 | December 2, 2023 | |||||||
| Net loss | $ | (751 | ) | $ | (1,797 | ) | ||
| Income tax benefit | (304 | ) | (494 | ) | ||||
| Depreciation & amortization | 1,015 | 1,116 | ||||||
| EBITDA | $ | (40 | ) | $ | (1,175 | ) | ||
| Six Months Ended | ||||||||
| November 30, 2024 | December 2, 2023 | |||||||
| Net loss | $ | (161 | ) | $ | (570 | ) | ||
| Income tax benefit | (246 | ) | (113 | ) | ||||
| Depreciation & amortization | 2,059 | 2,114 | ||||||
| EBITDA | $ | 1,652 | $ | 1,431 | ||||
| For Details Contact: | 40W267 Keslinger Road | |
| Edward J. Richardson | Robert J. Ben | PO BOX 393 |
| Chairman and CEO | EVP & CFO | LaFox, IL 60147-0393 USA |
| Phone: (630) 208-2320 | (630) 208-2203 | (630) 208-2200 | Fax: (630) 208-2550 |
FAQ
What was Richardson Electronics (RELL) Q2 FY25 revenue growth?
How much did RELL's Green Energy Solutions (GES) segment grow in Q2 FY25?
What is RELL's current backlog as of Q2 FY25?
What dividend did RELL declare for Q2 FY25?
What was RELL's cash position at the end of Q2 FY25?
