RICHARDSON ELECTRONICS LTD
For the period ended Aug 31, 2024. Filed Oct 10, 2024.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Aug 31, 2024 · Filed Oct 10, 2024
RELL$17.56+6.2%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-03-02; filed 2024-04-11.
0000950170-24-043629
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2024-08-31; filed 2024-10-10.
0000950170-24-114027
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 87 previous paragraphs and 75 current paragraphs.
32 unchanged; 33 reworded; 9 added; 19 removed; 3 previous and 1 current paragraphs rearranged.
Tables are not compared: 4 previous and 2 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (9)
Current report
Refer to Note 10, Segment and Geographic Information, for a discussion of the operating results by segment and geographic area.
Current report
Net income during the first quarter of fiscal 2025 was $0.6 million compared to net income of $1.2 million during the first quarter of fiscal 2024.
Current report
PMT net sales decreased 4.3% to $34.2 million during the first quarter of fiscal 2025 from $35.7 million during the first quarter of fiscal 2024. The decrease was mainly due to slower sales of electron devices slightly offset by growth in our Wafer Fab and RF and Microwave component businesses. Gross margin as a percentage of net sales decreased to 29.8% during the first quarter of fiscal 2025 as compared to 32.2% during the first quarter of fiscal 2024 due to unfavorable product mix and manufacturing under absorption.
Current report
Healthcare net sales increased 48.7% to $3.8 million during the first quarter of fiscal 2025 from $2.6 million during the first quarter of fiscal 2024 due to increases in all Healthcare product lines. Gross margin as a percentage of net sales increased to 32.4% during the first quarter of fiscal 2025 as compared to 31.6% during the first quarter of fiscal 2024 primarily due to cost efficiencies in scrap and freight.
Current report
Critical Accounting Policies and Estimates
Current report
The Company’s consolidated financial statements are prepared in accordance with U.S GAAP. Preparation of these financial statements requires the Company to make estimates, assumptions and judgments that affect the reported amounts of assets, liabilities, revenue and expenses, and related disclosure of contingent assets and liabilities. The Company’s most critical accounting policies and estimates are those most important to the portrayal of its financial condition and results of operations and which require the Company to make its most difficult and subjective judgments, often as a result of the need to make estimates regarding matters that are inherently uncertain. Although management believes that its estimates and assumptions are reasonable, they are based on information available when they are made and, therefore, may differ from estimates made under different assumptions or conditions.
Current report
The Company’s significant accounting policies are consistent with those discussed in Note 3, Significant Accounting Policies and Disclosures, to the consolidated financial statements and the MD&A section of the Company’s fiscal 2024 Annual Report on Form 10-K (the “2024 Annual Report”). During the three months ended August 31, 2024, there were no significant changes in the application of critical accounting policies.
Current report
Impact of New Accounting Standards
Current report
For information about recently issued accounting pronouncements, see Note 4, New Accounting Pronouncements - Not Yet Adopted, included in Part 1, Item 1.
Removed paragraphs (19)
Previous report
Refer to Note 9, Segment Reporting, to our unaudited consolidated financial statements for additional information on the operating and reportable segments.
Previous report
The third quarter of fiscal 2024 and fiscal 2023 both contained 13 weeks.
Previous report
Selling, general and administrative expenses were $14.4 million or 27.6% of net sales during the third quarter of fiscal 2024 compared to $14.8 million or 21.0% of net sales during the third quarter of fiscal 2023.
Previous report
Net income during the third quarter of fiscal 2024 was $0.8 million compared to net income of $6.3 million during the third quarter of fiscal 2023.
Previous report
Financial Summary – Nine Months Ended March 2, 2024
Previous report
Net sales during the first nine months of fiscal 2024 were $149.1 million, a decrease of 26.9%, compared to net sales of $203.8 million during the first nine months of fiscal 2023.
Previous report
Gross margin decreased to 30.3% during the first nine months of fiscal 2024 compared to 33.0% during the first nine months of fiscal 2023.
Previous report
Operating income during the first nine months of fiscal 2024 was $0.5 million compared to operating income of $23.6 million during the first nine months of fiscal 2023.
Previous report
Net income during the first nine months of fiscal 2024 was $0.2 million compared to net income of $18.2 million during the first nine months of fiscal 2023.
Previous report
During the first nine months of fiscal 2024, consolidated net sales decreased 26.9% compared to the first nine months of fiscal 2023. Sales for PMT decreased 26.0%, sales for GES decreased 42.6%, sales for Canvys decreased 21.2% and sales for Healthcare decreased 0.3%. The decrease in sales for PMT was mainly due to a cyclical downturn in the semi-wafer fabrication industry. The decrease in sales for GES reflected the project-based nature of this segment and was mainly due to lower shipments of battery modules for wind turbine products in the first half of the year and the completion of the EV locomotive prototype build in fiscal 2023. The decrease in sales for Canvys was primarily due to lower sales in the North American market. The decrease in sales for Healthcare was primarily due to decreases in equipment sales, partially offset by an increase in CT tube sales.
Previous report
Consolidated gross profit decreased to $45.2 million during the first nine months of fiscal 2024 compared to $67.3 million during the first nine months of fiscal 2023. Consolidated gross margin as a percentage of net sales decreased to 30.3% during the first nine months of fiscal 2024 compared to 33.0% during the first nine months of fiscal 2023. This decrease was primarily due to unfavorable product mix and manufacturing under absorption in PMT, unfavorable product mix in GES, manufacturing under absorption and higher scrap in Healthcare with a partial offset from the favorable product mix in Canvys.
Previous report
PMT net sales decreased 33.4% to $31.2 million during the third quarter of fiscal 2024 from $46.8 million during the third quarter of fiscal 2023. The decrease was mainly due to lower sales of semi-wafer fabrication products which mainly reflected the cyclical slowdown in that market. Gross margin as a percentage of net sales decreased to 28.3% during the third quarter of fiscal 2024 as compared to 32.9% during the third quarter of fiscal 2023 due to unfavorable product mix and manufacturing under absorption.
Previous report
PMT net sales decreased 26.0% to $98.2 million during the first nine months of fiscal 2024 from $132.8 million during the first nine months of fiscal 2023. The decrease was due to lower sales of semi-wafer fabrication products reflecting the cyclical slowdown in that market. Gross margin as a percentage of net sales decreased to 29.8% during the first nine months of fiscal 2024 as compared to 33.9% during the first nine months of fiscal 2023 due to unfavorable product mix and manufacturing under absorption.
Previous report
GES net sales decreased 42.6% to $18.5 million during the first nine months of fiscal 2024 from $32.3 million during the first nine months of fiscal 2023. The decrease reflected the project-based nature of this segment and was mainly due to lower shipments of battery modules for wind turbine products in Q1 and Q2 and completion of our EV locomotive prototype build in fiscal 2023. Gross margin was 29.2% during the first nine months of fiscal 2024 as compared to 31.4% during the first nine months of fiscal 2023 due to product mix.
Previous report
Canvys net sales decreased 32.0% to $6.6 million during the third quarter of fiscal 2024 from $9.7 million during the third quarter of fiscal 2023, due to customer pushouts in the North American market. Gross margin as a percentage of net sales increased to 34.4% during the third quarter of fiscal 2024 from 32.0% during the third quarter of fiscal 2023 primarily due to improved product mix.
Previous report
Healthcare net sales increased 29.5% to $3.1 million during the third quarter of fiscal 2024 from $2.4 million during the third quarter of fiscal 2023 primarily due to increases in parts and CT tube sales, partially offset by a decrease in equipment sales. Gross margin as a percentage of net sales increased to 41.6% during the third quarter of fiscal 2024 as compared to 39.8% during the third quarter of fiscal 2023 primarily due to product mix.
Previous report
Healthcare net sales decreased 0.3% during the first nine months of fiscal 2024 from $8.6 million during the first nine months of fiscal 2023 primarily due to a decrease in equipment sales, partially offset by an increase in CT tube sales. Gross margin as a percentage of net sales decreased to 29.5% during the first nine months of fiscal 2024 as compared to 32.9% during the first nine months of fiscal 2023 primarily due to manufacturing under absorption and higher scrap expense.
Previous report
SG&A increased $1.0 million or 2.3% to $44.7 million for the first nine months of fiscal 2024 when compared to the prior year. The increase from the first nine months of fiscal 2023 mainly reflected higher salaries and R&D expenses, partially offset by lower incentive expense. Expressed as a percentage of net sales, SG&A for the first nine months of fiscal 2024 increased to 30.0% compared to 21.4% for the first nine months of fiscal 2023.
Previous report
Cash provided by investing activities of $0.2 million during the first nine months of fiscal 2023 was mainly due to the proceeds from investment maturities as well as proceeds from the sale of assets partially offset by capital expenditures. Capital expenditures were primarily related to our IT system, as well as our LaFox manufacturing business and facilities, which also supports both EDG and Green Energy Solutions. The Company did not have any investment purchases in the first nine months of fiscal 2023.
Reworded paragraphs (33)
Previous wording
Certain statements in this report may constitute “forward-looking” statements within the meaning of the Private Securities Litigation Reform Act of 1995. The terms “may”, “should”, “could”, “anticipate”, “believe”, “continues”, “estimate”, “expect”, “intend”, “objective”, “plan”, “potential”, “project” and similar expressions are intended to identify forward-looking statements. These statements are not guarantees of future performance and involve risks, uncertainties and assumptions that are difficult to predict. These statements are based on management’s current expectations, intentions or beliefs and are subject to a number of factors, assumptions and uncertainties that could cause actual results to differ materially from those described in the forward-looking statements. Factors that could cause or contribute to such differences or that might otherwise impact the business include; economic, labor and political conditions; global business disruption caused by the Russian invasion of Ukraine and related sanctions; currency exchange fluctuations; and the ability of the Company to manage its growth and the risk factors set forth in our Annual Report on Form 10-K filed with the SEC on July 31, 2023. We undertake no obligation to update any such factor or to publicly announce the results of any revisions to any forward-looking statements contained herein whether as a result of new information, future events or otherwise.
Current wording
Certain statements in this report may constitute “forward-looking” statements within the meaning of the Private Securities Litigation Reform Act of 1995. The terms “may,” “should,” “could,” “anticipate," “believe,” “continue,” “estimate,” “expect,” “intend,” “objective,” “plan,” “potential," “project” and similar expressions are intended to identify forward-looking statements. These statements are not guarantees of future performance and involve risks, uncertainties and assumptions that are difficult to predict. These statements are based on management’s current expectations, intentions or beliefs and are subject to a number of factors, assumptions and uncertainties that could cause actual results to differ materially from those described in the forward-looking statements. Factors that could cause or contribute to such differences or that might otherwise impact the business include; economic, labor and political conditions; global business disruption caused by the Russian - Ukraine and Israel - Hamas wars; currency exchange fluctuations; and the ability of the Company to manage its growth and the risk factors set forth in our Annual Report on Form 10-K filed with the SEC on August 5, 2024. We undertake no obligation to update any such factor or to publicly announce the results of any revisions to any forward-looking statements contained herein whether as a result of new information, future events or otherwise.
Previous wording
Results of Operations – an analysis and comparison of our consolidated results of operations for the three and nine-month periods ended March 2, 2024 and February 25, 2023, as reflected in our unaudited consolidated statements of comprehensive income.
Current wording
Results of Operations – an analysis and comparison of our consolidated results of operations for the three month periods ended August 31, 2024, and September 2, 2023, as reflected in our unaudited consolidated statements of comprehensive income.
Previous wording
Liquidity, Financial Position and Capital Resources – a discussion of our primary sources and uses of cash for the nine-month periods ended March 2, 2024 and February 25, 2023, and a discussion of changes in our financial position.
Current wording
Liquidity, Financial Position and Capital Resources – a discussion of our primary sources and uses of cash for the three month periods ended August 31, 2024 and September 2, 2023, and a discussion of changes in our financial position.
Previous wording
Richardson Electronics, Ltd. (the "Company", "we", "our") is a leading global manufacturer of engineered solutions, power grid and microwave tubes and related consumables; power conversion and RF and microwave components; high-value replacement parts, tubes and service training for diagnostic imaging equipment; and customized display solutions. Nearly 55% of our products are manufactured at our facilities located in LaFox, Illinois, Marlborough, Massachusetts and Donaueschingen, Germany, or by one of our manufacturing partners throughout the world. All our partners manufacture to our strict specifications and per our supplier code of conduct. We serve customers in the alternative energy, healthcare, aviation, broadcast, communications, industrial, marine, medical, military, scientific and semiconductor markets. The Company’s strategy is to provide specialized technical expertise and “engineered solutions” based on our core engineering and manufacturing capabilities. The Company provides solutions and adds value through design-in support, systems integration, prototype design and manufacturing, testing, logistics and aftermarket technical service and repair through its global infrastructure.
Current wording
Richardson Electronics, Ltd. (the "Company," "we," "our") is a leading global manufacturer of engineered solutions, power grid and microwave tubes and related consumables; power conversion and RF and microwave components; high-value replacement parts, tubes and service training for diagnostic imaging equipment; and customized display solutions. Nearly 50% of our products are manufactured at our facilities located in LaFox, Illinois, Marlborough, Massachusetts and Donaueschingen, Germany, or by one of our manufacturing partners throughout the world. We serve customers in the alternative energy, healthcare, aviation, broadcast, communications, industrial, marine, medical, military, scientific and semiconductor markets. The Company’s strategy is to provide specialized technical expertise and “engineered solutions” based on our core engineering and manufacturing capabilities. The Company provides solutions and adds value through design-in support, systems integration, prototype design and manufacturing, testing, logistics and aftermarket technical service and repair through its global infrastructure.
Previous wording
Some of the Company's products are manufactured in China and are imported into the United States. The Office of the United States Trade Representative ("USTR") instituted additional 10% to 25% tariffs on the importation of a number of products into the United States from China effective July 6, 2018, with additional products added August 23, 2018 and September 24, 2018. These additional tariffs are a response to what the USTR considers to be certain unfair trade practices by China. A number of the Company's products manufactured in China are now subject to these additional duties of 25% when imported into the United States.
Current wording
Some of the Company's products are manufactured in China and imported into the United States. The Office of the United States Trade Representative ("USTR") instituted tariffs on the importation of a number of products into the United States from China. These tariffs are a response to what the USTR considers to be certain unfair trade practices by China. A number of the Company's products manufactured in China are subject to duties when imported into the United States.
Previous wording
Management continues to work with suppliers and customers to mitigate the impact of the tariffs in our markets. However, if the Company is unable to successfully pass through the additional cost of these tariffs, or if the higher prices reduce demand for the Company's products, it will have a negative effect on the Company's sales and gross margins.
Current wording
Management continues to work with its suppliers as well as its customers to mitigate the impact of the tariffs on our customers. However, if the Company is unable to successfully pass through the additional cost of these tariffs, or if the higher prices reduce demand for the Company's products, it will have a negative effect on the Company's sales and gross margins.
Previous wording
Healthcare manufactures, repairs, refurbishes and distributes high value replacement parts and equipment for the healthcare market including hospitals, medical centers, asset management companies, independent service organizations and multi-vendor service providers. Products include diagnostic imaging replacement parts for CT and MRI systems; replacement CT and MRI tubes; CT service training; MRI coils, cold heads and RF amplifiers; hydrogen thyratrons, klystrons, magnetrons; flat panel detector upgrades; pre-owned CT systems; and additional replacement solutions currently under development for the diagnostic imaging service market. Through a combination of newly developed products and partnerships, service offerings and training programs, we believe we can help our customers improve efficiency while lowering the cost of healthcare delivery.
Current wording
Healthcare manufactures, repairs, refurbishes and distributes high value replacement parts and equipment for the healthcare market including hospitals, medical centers, asset management companies, independent service organizations and multi-vendor service providers. Products include diagnostic imaging replacement parts for CT and MRI systems; replacement CT and MRI tubes; CT service training; MRI and RF amplifiers; hydrogen thyratrons, klystrons, magnetrons; flat panel detector upgrades; pre-owned CT systems; and additional replacement solutions currently under development for the diagnostic imaging service market. Through a combination of newly developed products and partnerships, service offerings and training programs, we believe we can help our customers improve efficiency while lowering the cost of healthcare delivery.
Previous wording
The first nine months of fiscal 2024 contained 40 weeks and the first nine months of fiscal 2023 contained 39 weeks.
Current wording
The first quarter of fiscal 2025 contained 13 weeks and the first quarter of fiscal 2024 contained 14 weeks.
Previous wording
Net sales during the third quarter of fiscal 2024 were $52.4 million, a decrease of 25.6%, compared to net sales of $70.4 million during the third quarter of fiscal 2023.
Current wording
Net sales during the first quarter of fiscal 2025 were $53.7 million, an increase of 2.2%, compared to net sales of $52.6 million during the first quarter of fiscal 2024.
Previous wording
Gross margin decreased to 29.5% during the third quarter of fiscal 2024 compared to 31.8% during the third quarter of fiscal 2023.
Current wording
Gross margin decreased to 30.6% during the first quarter of fiscal 2025 compared to 32.8% during the first quarter of fiscal 2024.
Previous wording
Selling, general and administrative expenses were $44.7 million or 30.0% of net sales during the first nine months of fiscal 2024 compared to $43.7 million or 21.4% of net sales during the first nine months of fiscal 2023.
Current wording
Selling, general and administrative expenses were $16.1 million or 30.0% of net sales during the first quarter of fiscal 2025 compared to $15.8 million or 30.0% of net sales during the first quarter of fiscal 2024.
Previous wording
Operating income during the third quarter of fiscal 2024 was $1.0 million compared to operating income of $7.6 million during the third quarter of fiscal 2023.
Current wording
Operating income during the first quarter of fiscal 2025 was $0.3 million compared to operating income of $1.5 million during the first quarter of fiscal 2024.
Previous wording
Net sales by segment and percent change during the third quarter and first nine months of fiscal 2024 and fiscal 2023 were as follows (in thousands):
Current wording
Net sales by segment and percent change during the first quarter of fiscal 2025 and fiscal 2024 were as follows (in thousands):
Previous wording
During the third quarter of fiscal 2024, consolidated net sales decreased 25.6% compared to the third quarter of fiscal 2023. Sales for PMT decreased 33.4 %, sales for GES increased 0.5%, sales for Canvys decreased 32.0% and sales for Healthcare increased 29.5%. The decrease in PMT was mainly due to a cyclical downturn in the semi-wafer fabrication industry. The increase in GES was mainly due to increased shipments of battery modules for wind turbine products. The decrease in Canvys was primarily due to customer pushouts in the North American market. The increase in Healthcare was primarily due to increases in parts and CT tube sales, partially offset by a decrease in equipment sales.
Current wording
During the first quarter of fiscal 2025, consolidated net sales increased 2.2% compared to the first quarter of fiscal 2024. Sales for PMT decreased 4.3%, sales for GES increased 84.0%, sales for Canvys decreased 22.8% and sales for Healthcare increased 48.7%. The decrease in PMT was mainly due to slower sales of electron devices slightly offset by growth in our Wafer Fab and RF and Microwave component businesses. The increase in GES was mainly due to increased shipments of power management products focused on battery modules for wind turbine and electric locomotive products. The decrease in Canvys was attributable to lower sales in the North American and European markets. The increase in Healthcare reflected higher sales in all product lines.
Previous wording
Gross profit by segment and percent of net sales for the third quarter and first nine months of fiscal 2024 and fiscal 2023 were as follows (in thousands):
Current wording
Gross profit by segment and percent of net sales for the first quarter of fiscal 2025 and fiscal 2024 were as follows (in thousands):
Previous wording
Consolidated gross profit decreased to $15.4 million during the third quarter of fiscal 2024 compared to $22.4 million during the third quarter of fiscal 2023. Consolidated gross margin as a percentage of net sales decreased to 29.5% during the third quarter of fiscal 2024 when compared to 31.8% during the third quarter of fiscal 2023. This decrease was mainly due to the unfavorable product mix and manufacturing under absorption in PMT with a partial offset from the favorable product mix in GES, Canvys and Healthcare.
Current wording
Consolidated gross profit decreased to $16.4 million during the first quarter of fiscal 2025 compared to $17.3 million during the first quarter of fiscal 2024. Consolidated gross margin as a percentage of net sales during the first quarter of fiscal 2025 decreased to 30.6% when compared to 32.8% during the first quarter of fiscal 2024. This decrease was mainly due to the unfavorable product mix and manufacturing under absorption in PMT and unfavorable product mix in GES with a partial offset from the favorable product mix in Canvys and cost efficiencies in scrap and freight in Healthcare.
Previous wording
GES net sales increased 0.5% to $11.5 million during the third quarter of fiscal 2024 compared to the third quarter of fiscal 2023. The increase reflected the project-based nature of this segment and was mainly due to increased shipments of battery modules for wind turbine products. Gross margin as a percentage of net sales increased to 26.6% during the third quarter of fiscal 2024 as compared to 25.7% during the third quarter of fiscal 2023 due to product mix.
Current wording
GES net sales increased 84.0% to $8.1 million during the first quarter of fiscal 2025 from $4.4 million during the first quarter of fiscal 2024. The increase reflected the project-based nature of this segment and was mainly due to increased shipments of power management products focused on battery modules for wind turbine and electric locomotive products. Gross margin as a percentage of net sales decreased to 29.4% during the first quarter of fiscal 2025 as compared to 36.0% during the first quarter of fiscal 2024 due to product mix.
Previous wording
Canvys net sales decreased 21.2% to $23.8 million during the first nine months of fiscal 2024 from $30.2 million during the first nine months of fiscal 2023, due to lower sales in the North American market. Gross margin as a percentage of net sales increased to 34.0% during the first nine months of fiscal 2024 from 31.0% during the first nine months of fiscal 2023 primarily due to improved product mix and lower freight costs.
Current wording
Canvys net sales decreased 22.8% to $7.6 million during the first quarter of fiscal 2025 from $9.9 million during the first quarter of fiscal 2024, due to lower sales in both the North American and European markets. Gross margin as a percentage of net sales increased to 34.3% during the first quarter of fiscal 2025 from 34.0% during the first quarter of fiscal 2024 primarily due to improved product mix.
Previous wording
Selling, general and administrative expenses (“SG&A”) decreased slightly to $14.4 million for the third quarter of fiscal 2024 when compared to $14.8 million for the year ago quarter. The decrease from the third quarter of fiscal 2023 reflected lower incentives due to financial performance partially offset by higher R&D expenses. Expressed as a percentage of net sales, SG&A for the third quarter of fiscal 2024 increased to 27.6% compared to 21.0% for the third quarter of fiscal 2023.
Current wording
Selling, general and administrative expenses (“SG&A”) increased slightly to $16.1 million for the first quarter of fiscal 2025 when compared to $15.8 million for the year ago quarter. This increase of 2.0% from the first quarter of fiscal 2024 mainly reflected higher incentives due to sales growth. Expressed as a percentage of net sales, SG&A was 30.0% for the first quarter of fiscal 2025 and remained unchanged compared to the first quarter of fiscal 2024.
Previous wording
Other expense was less $0.1 million during the third quarter of fiscal 2024, compared to other income of $0.4 million for the third quarter of fiscal 2023. Other expense during the third quarter of fiscal 2024 included interest income and foreign exchange losses. Our foreign exchange gains and losses are primarily due to the translation of U.S. dollars held in non-U.S. entities. We currently do not utilize derivative instruments to manage our exposure to foreign currency.
Current wording
Other income was $0.3 million during the first quarter of fiscal 2025, compared to other income of $0.1 million for the first quarter of fiscal 2024. Other income during the first quarter of fiscal 2025 included interest income and foreign exchange gains. Our foreign exchange gains and losses are primarily due to the translation of U.S. dollars held in non-U.S. entities. We currently do not utilize derivative instruments to manage our exposure to foreign currency.
Previous wording
We recorded an income tax provision of $0.1 million and $5.3 million for the first nine months of fiscal 2024 and the first nine months of fiscal 2023, respectively. The effective income tax rate during the first nine months of fiscal 2024 was a tax provision of 39.2% as compared to a tax provision of 22.5% during the first nine months of fiscal 2023. The difference in rate during the first nine months of fiscal 2024 as compared to the first nine months of fiscal 2023 reflects changes in our geographical distribution of income, which is primarily driven by a decrease in U.S. earnings for fiscal 2024, and the state income tax provision, as well as the U.S. research and development credits. The 39.2% effective income tax rate differs from the federal statutory rate of 21% as a result of our geographical distribution of income, which is primarily driven by a decrease in U.S. earnings for fiscal 2024, state income tax provision and the U.S. research and development credit.
Current wording
We recorded an income tax provision of $0.1 million and $0.4 million for the first three months of fiscal 2025 and the first three months of fiscal 2024, respectively. The effective income tax rate during the first three months of fiscal 2025 was a tax provision of 9.0% as compared to a tax provision of 23.7% during the first three months of fiscal 2024. The difference in rate during the first three months of fiscal 2025 as compared to the first three months of fiscal 2024 reflects changes in our geographical distribution of income (loss), which is primarily driven by a decrease in U.S. earnings for fiscal 2025 and the state income tax provision, as well as an increase in the utilization of U.S. research and development credits. The 9.0% effective income tax rate differs from the federal statutory rate of 21% as a result of our geographical distribution of income (loss), as well as the utilization of U.S. research and development credits.
Previous wording
In the normal course of business, we are subject to examination by taxing authorities throughout the world. Generally, years prior to fiscal 2019 are closed for examination under the statute of limitation for U.S. federal, U.S. state and local or non-U.S. tax jurisdictions. Our primary foreign tax jurisdictions are Germany and the Netherlands. We have tax years open in Germany beginning in fiscal 2019 and the Netherlands beginning in fiscal 2021.
Current wording
In the normal course of business, we are subject to examination by taxing authorities throughout the world. Years prior to fiscal 2015 are closed for examination under the statute of limitation for U.S. federal and U.S. state. In the Netherlands, years prior to fiscal 2019 are closed for examination. We are under examination in Germany for fiscal years 2019 to 2022. We have no current open audits in the U.S.
Previous wording
The Company did not have any uncertain tax positions as of March 2, 2024 and May 27, 2023. We record penalties and interest related to uncertain tax positions in the income tax expense line item within the consolidated statements of comprehensive loss when applicable.
Current wording
The Company recorded a $0.3 million liability for uncertain tax positions as of August 31, 2024. The uncertain tax positions totaled $0.1 million as of June 1, 2024. We record interest related to uncertain tax positions in the income tax expense line item within the Consolidated Statements of Comprehensive Income. Accrued interest was included within the related tax liability line in the Consolidated Balance Sheets. We have recorded a liability of less than $0.1 million for interest and penalties as it relates to the reserve of the research and development credit as of June 1, 2024 and August 31, 2024, respectively.
Previous wording
Net income during the third quarter of fiscal 2024 was $0.8 million, or $0.05 per diluted common share and $0.05 per Class B diluted common share as compared to net income of $6.3 million during the third quarter of fiscal 2023 or $0.44 per diluted common share and $0.40 per Class B diluted common share.
Current wording
Net income during the first quarter of fiscal 2025 was $0.6 million, or $0.04 per diluted common share and $0.04 per Class B diluted common share as compared to net income of $1.2 million during the first quarter of fiscal 2024 or $0.09 per diluted common share and $0.08 per Class B diluted common share.
Previous wording
Our operations and cash needs have been primarily financed through cash on hand.
Current wording
Our operations and cash needs have been primarily financed through income from operations and cash on hand.
Previous wording
Cash and cash equivalents were $18.9 million at March 2, 2024. Cash and cash equivalents by geographic area at March 2, 2024 consisted of $5.7 million in North America, $5.9 million in Europe, $1.0 million in Latin America and $6.3 million in Asia/Pacific. We repatriated $0.3 million to the United States in the second quarter of fiscal 2024 from our entity in Mexico. Although the Tax Cuts and Jobs Act generally eliminated federal income tax on future cash repatriation to the United States, cash repatriation may be subject to state and local taxes, withholding or similar taxes. See Note 8, Income Taxes, of the notes to our consolidated financial statements in Part II, Item 8 of this Annual Report on Form 10-K for the fiscal year ended May 27, 2023, filed with the SEC on July 31, 2023, for further information.
Current wording
Cash and cash equivalents were $23.0 million at August 31, 2024. Cash and cash equivalents by geographic area at August 31, 2024 consisted of $4.1 million in North America, $9.9 million in Europe, $1.2 million in Latin America and $7.8 million in Asia/Pacific. No cash was repatriated to the United States in the first quarter of fiscal 2025. Although the Tax Cuts and Jobs Act generally eliminated federal income tax on future cash repatriation to the United States, cash repatriation may be subject to state and local taxes, withholding or similar taxes. See Note 8, Income Taxes, of the notes to our consolidated financial statements in Part II, Item 8 of this Annual Report on Form 10-K for the fiscal year ended June 1, 2024, filed with the SEC on August 5, 2024, for further information.
Previous wording
Cash and cash equivalents were $25.0 million on May 27, 2023. Cash and cash equivalents by geographic area on May 27, 2023 consisted of $8.1 million in North America, $8.6 million in Europe, $1.5 million in Latin America and $6.8 million in Asia/Pacific. No funds were repatriated to the United States in fiscal 2023 from our foreign entities.
Current wording
Cash and cash equivalents were $24.3 million at June 1, 2024. Cash and cash equivalents by geographic area at June 1, 2024 consisted of $7.1 million in North America, $7.3 million in Europe, $1.1 million in Latin America and $8.8 million in Asia/Pacific. We repatriated $0.3 million to the United States in the second quarter of fiscal 2024 from our entity in Mexico.
Previous wording
On March 20, 2023, the Company established a senior, secured revolving credit facility agreement with a three-year term in an aggregate principal amount not to exceed $30 million, including a swingline loan and a letter of credit sub-facility (collectively, the "Revolving Credit Facility") with PNC Bank. The Revolving Credit Facility is guaranteed by the Company's domestic subsidiaries. Proceeds of the borrowings under the Revolving Credit Facility are expected to be used for working capital and general corporate purposes of the Company and its subsidiaries. The Company utilized $3.7 million of the credit line to address short-term cash requirements and repaid that $3.7 million during the third quarter of fiscal 2024. As of the end of the third quarter for fiscal 2024 and the date of this report, no amounts were outstanding under the Revolving Credit Facility.
Current wording
On March 20, 2023, the Company established a senior, secured revolving credit facility agreement with a three-year term in an aggregate principal amount not to exceed $30 million, including a swingline loan and a letter of credit sub-facility (collectively, the "Revolving Credit Facility") with PNC Bank. The Revolving Credit Facility is guaranteed by the Company's domestic subsidiaries. Proceeds of the borrowings under the Revolving Credit Facility are expected to be used for working capital and general corporate purposes of the Company and its subsidiaries. The Company utilized $1.0 million of the credit line to address short-term cash requirements and repaid that $1.0 million during the first quarter of fiscal 2025. As of the end of the first quarter for fiscal 2025 and the date of this report, no amounts were outstanding under the Revolving Credit Facility.
Previous wording
Operating activities used $11.4 million of cash during the first nine months of fiscal 2023. We had a net income of $18.2 million during the first nine months of fiscal 2023, which included non-cash stock-based compensation expense of $0.7 million associated with the issuance of stock option and restricted stock awards, inventory reserve provisions of $0.3 million and depreciation and amortization expense of $2.7 million associated with our property and equipment as well as amortization of our intangible assets. Changes in our operating assets and liabilities used $33.4 million in cash during the first nine months of fiscal 2023, net of foreign currency exchange gains and losses, included an increase in accounts receivable of $12.7 million, an increase in inventory of $21.8 million and an increase in prepaid expenses of $0.6 million. Partially offsetting the cash utilization for accounts receivable, inventory and prepaid expenses was an increase in accounts payable and accrued liabilities of $1.3 million. The increase in accounts receivable was primarily due to increased sales. The majority of the inventory increase supported the product growth in LaFox manufacturing, Green Energy Solutions and Canvys, in addition to increases in the inventory for electron tubes. The increase in accounts payable was related to the inventory increase and the increase in accrued liabilities was timing related.
Current wording
Operating activities generated $0.4 million of cash during the first three months of fiscal 2025. We had a net income of $0.6 million during the first three months of fiscal 2025, which included non-cash stock-based compensation expense of $0.6 million associated with the issuance of stock option and restricted stock awards, inventory reserve provisions of $0.1 million, unrealized foreign exchange gain of $0.4 million and depreciation and amortization expense of $1.0 million associated with our property, plant and equipment and intangible assets. Changes in our operating assets and liabilities used $1.9 million in cash during the first three months of fiscal 2025, net of foreign currency exchange gains and losses included an increase in inventory of $0.1 million and an increase in accounts receivable of $5.9 million. Partially offsetting the cash utilization was an increase in accounts payable and accrued liabilities of $4.1 million. The increase in accounts receivable was primarily due to the higher level of sales for the current quarter compared to the prior quarter. The changes in accounts payable and accrued liabilities were timing related.
Previous wording
Operating activities used $0.7 million of cash during the first nine months of fiscal 2024. We had a net income of $0.2 million during the first nine months of fiscal 2024, which included non-cash stock-based compensation expense of $1.0 million associated with the issuance of stock option and restricted stock awards, inventory reserve provisions of $0.5 million and depreciation and amortization expense of $3.2 million associated with our property and equipment as well as amortization of our intangible assets. Changes in our operating assets and liabilities used $5.7 million in cash during the first nine months of fiscal 2024, net of foreign currency exchange gains and losses included an increase in inventory of $2.2 million, a decrease in accounts payable of $5.2 million and an increase in prepayments of $0.1 million. Partially offsetting the cash utilization was a decrease in receivables of $1.0 million and an increase in accrued liabilities of $0.6 million. The decrease in accounts receivable was primarily due to the lower level of sales across our operating segments in the current quarter. Most of the inventory increase supported the products for electron tubes and Healthcare. The changes in accounts payable and accrued liabilities were timing related.
Current wording
Operating activities generated $1.0 million of cash during the first three months of fiscal 2024. We had a net income of $1.2 million during the first three months of fiscal 2024, which included non-cash stock-based compensation expense of $0.5 million associated with the issuance of stock option and restricted stock awards, inventory reserve provisions of $0.1 million and depreciation and amortization expense of $1.0 million associated with our property and equipment as well as amortization of our intangible assets. Changes in our operating assets and liabilities used $1.8 million in cash during the first three months of fiscal 2024, net of foreign currency exchange gains and losses included an increase in inventory of $3.2 million, a decrease in accounts payable of $2.4 million and a decrease in accrued liabilities of $1.1 million. Partially offsetting the cash utilization were decreases in receivables of $4.5 million and prepayments of $0.4 million. The decrease in accounts receivable was primarily due to the lower level of sales in the current quarter. Most of the inventory increase supported the products for electron tubes and Healthcare. The decreases in accounts payable and accrued liabilities were timing related.
Previous wording
Cash used in investing activities of $3.1 million during the first nine months of fiscal 2024 was due to capital expenditures. Capital expenditures were primarily related to our IT system and the LaFox manufacturing and facilities renovation. LaFox manufacturing primarily supports the Electron Device Group ("EDG") and Green Energy Solutions ("GES").
Current wording
Cash used in investing activities of $1.1 million during the first three months of fiscal 2024 was due to capital expenditures. Capital expenditures were primarily related to our IT system and the LaFox manufacturing and facilities renovation. LaFox manufacturing primarily supports the Electron Device Group ("EDG") and Green Energy Solutions ("GES").
Previous wording
Cash used in financing activities of $2.3 million during the first nine months of fiscal 2024 primarily resulted from $2.5 million of dividend payments to stockholders partially offset by $0.3 million of proceeds from the issuance of stock.
Current wording
Cash used in financing activities of $0.9 million during the first three months of fiscal 2025 primarily resulted from $0.9 million of dividend payments to stockholders partially offset by $0.1 million of proceeds from the issuance of stock.
Previous wording
Cash provided by financing activities of $0.9 million during the first nine months of fiscal 2023 primarily resulted from the $3.4 million proceeds from the issuance of stock less the $2.5 million of dividend payments to stockholders.
Current wording
Cash used by financing activities of $0.6 million during the first three months of fiscal 2024 primarily resulted from $0.8 million of dividend payments to stockholders offset by $0.3 million of proceeds from the issuance of stock.
Rearranged current paragraphs (1)
Current report — wording carried from elsewhere
Cash used in investing activities of $0.9 million during the first three months of fiscal 2025 was due to capital expenditures. Capital expenditures were primarily related to our IT system and LaFox manufacturing and facilities. LaFox manufacturing primarily supports the Electron Device Group ("EDG") and Green Energy Solutions ("GES").
Rearranged previous paragraphs (3)
Previous report — wording carried elsewhere
Other expense was $0.2 million during the first nine months of fiscal 2024, compared to other expense of $0.1 million for the first nine months of fiscal 2023. Other expense during the first nine months of fiscal 2024 included interest income and foreign exchange losses. Our foreign exchange gains and losses are primarily due to the translation of U.S. dollars held in non-U.S. entities.
Previous report — wording carried elsewhere
We recorded an income tax provision of $0.2 million and $1.7 million for the third quarter of fiscal 2024 and the third quarter of fiscal 2023, respectively. The effective income tax rate during the third quarter of fiscal 2024 was 23.4% as compared to 20.7% during the third quarter of fiscal 2023. The difference in rate during the third quarter of fiscal 2024 as compared to the third quarter of fiscal 2023 reflects changes in our geographical distribution of income, which is primarily driven by a decrease in U.S. earnings for fiscal 2024 and the state income tax provision as well as the U.S. research and development credits. The 23.4% effective income tax rate differs from the federal statutory rate of 21% as a result of our geographical distribution of income and the utilization of the U.S. research and development credit.
Previous report — wording carried elsewhere
Net income during the first nine months of fiscal 2024 was $0.2 million, or $0.01 per diluted common share and $0.01 per Class B diluted common share as compared to net income of $18.2 million during the first nine months of fiscal 2023 or $1.27 per diluted common share and $1.15 per Class B diluted common share.