RICHARDSON ELECTRONICS, LTD.

Previous wording

Results of Operations – an analysis and comparison of our consolidated results of operations for the three month and six month periods ended November 30, 2024 and December 2, 2023, as reflected in our unaudited consolidated statements of comprehensive (loss) income.

Current wording

Results of Operations – an analysis and comparison of our consolidated results of operations for the three month and nine month periods ended March 1, 2025 and March 2, 2024, as reflected in our Unaudited Consolidated Statements of Comprehensive (Loss) Income.

Previous wording

Liquidity, Financial Position and Capital Resources – a discussion of our primary sources and uses of cash for the six month periods ended November 30, 2024 and December 2, 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 nine month periods ended March 1, 2025 and March 2, 2024, 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. Approximately 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.

Current wording

Richardson Electronics, Ltd. (the "Company," "we," "our") 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; tubes for diagnostic imaging equipment; and customized display solutions. Approximately 50% of our products are manufactured in LaFox, Illinois, Marlborough, Massachusetts, or 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.

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 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. After the January 2025 sale of assets to DirectMed, the Company only manufactures and repairs CT tubes and sells them to DirectMed under an exclusive supply agreement.

Previous wording

Refer to Note 10, Segment and Geographic Information, for a discussion of the operating results by segment and geographic area.

Current wording

Refer to Note 11, Segment and Geographic Information, in Part I, Item 1 for a discussion of the operating results by segment and geographic area.

Previous wording

The second quarter of fiscal 2025 and fiscal 2024 both contained 13 weeks.

Current wording

The third quarter of fiscal 2025 and fiscal 2024 both contained 13 weeks.

Previous wording

Net sales during the second quarter of fiscal 2025 were $49.5 million, an increase of 12.1%, compared to net sales of $44.1 million during the second quarter of fiscal 2024.

Current wording

Net sales during the third quarter of fiscal 2025 were $53.8 million, an increase of 2.7%, compared to net sales of $52.4 million during the third quarter of fiscal 2024.

Previous wording

Gross margin increased to 31.0% during the second quarter of fiscal 2025 compared to 28.4% during the second quarter of fiscal 2024.

Current wording

Gross margin increased to 31.0% during the third quarter of fiscal 2025 compared to 29.5% during the third quarter of fiscal 2024.

Previous wording

Selling, general and administrative expenses were $16.0 million or 32.3% of net sales during the second quarter of fiscal 2025 compared to $14.5 million or 32.8% of net sales during the second quarter of fiscal 2024.

Current wording

Selling, general and administrative expenses were $14.5 million or 26.9% of net sales during the third quarter of fiscal 2025 compared to $14.4 million or 27.6% of net sales during the third quarter of fiscal 2024.

Previous wording

Operating loss during the second quarter of fiscal 2025 was $0.7 million compared to an operating loss of $2.0 million during the second quarter of fiscal 2024.

Current wording

Operating loss during the third quarter of fiscal 2025 was $2.7 million compared to an operating income of $1.0 million during the third quarter of fiscal 2024.

Previous wording

The first six months of fiscal 2025 contained 26 weeks and the first six months of fiscal 2024 contained 27 weeks.

Current wording

The first nine months of fiscal 2025 contained 39 weeks and the first nine months of fiscal 2024 contained 40 weeks.

Previous wording

Net sales during the first six months of fiscal 2025 were $103.2 million, an increase of 6.7%, compared to net sales of $96.7 million during the first six months of fiscal 2024.

Current wording

Net sales during the first nine months of fiscal 2025 were $157.0 million, an increase of 5.3%, compared to net sales of $149.1 million during the first nine months of fiscal 2024.

Previous wording

Gross margin of 30.8% during the first six months of fiscal 2025 was unchanged compared to the 30.8% during the first six months of fiscal 2024.

Current wording

Gross margin of 30.8% during the first nine months of fiscal 2025 increased compared to 30.3% during the first nine months of fiscal 2024.

Previous wording

Operating loss during the first six months of fiscal 2025 was $0.4 million compared to an operating loss of $0.5 million during the first six months of fiscal 2024.

Current wording

Operating loss during the first nine months of fiscal 2025 was $3.1 million compared to an operating income of $0.5 million during the first nine months of fiscal 2024.

Previous wording

Net sales by segment and percentage change during the second quarter and first six months of fiscal 2025 and fiscal 2024 were as follows (in thousands):

Current wording

Net sales by segment and percentage change during the third quarter and first nine months of fiscal 2025 and fiscal 2024 were as follows (in thousands):

Previous wording

During the second quarter of fiscal 2025, consolidated net sales increased 12.1% compared to the second quarter of fiscal 2024. Sales for PMT increased 9.9%, sales for GES increased 129.0%, sales for Canvys decreased 6.0% and sales for Healthcare decreased 22.8%. The increase in PMT was mainly due to increased sales of electron devices, RF and Microwave components and engineered solutions for the semiconductor wafer fabrication market. The increase in GES was mainly due to increased shipments of power management products focused on green energy applications. The decrease in Canvys was attributable to lower sales in the European markets. The decrease in Healthcare reflected lower sales in all product lines.

Current wording

During the third quarter of fiscal 2025, consolidated net sales increased 2.7% compared to the third quarter of fiscal 2024. Sales for PMT increased 6.6%, sales for GES decreased 19.4%, sales for Canvys increased 39.5% and sales for Healthcare decreased 32.3%. The increase in PMT was mainly due to increased sales of engineered solutions for the semiconductor wafer fabrication market. The decrease in GES was mainly due to a large order in fiscal 2024 that did not repeat in fiscal 2025's third quarter and a shipping delay on an EV locomotive order. The increase in Canvys was attributable to sales in the North American markets. The decrease in Healthcare reflected parts, service and equipment sales for two months due to the January 2025 sale of the majority of Healthcare assets to DirectMed.

Previous wording

During the first six months of fiscal 2025, consolidated net sales increased 6.7% compared to the first six months of fiscal 2024. Sales for PMT increased 2.3%, sales for GES increased 100.8%, sales for Canvys decreased 15.7% and sales for Healthcare increased 10.5%. The increase in PMT was mainly due to increased sales of RF and Microwave components and engineered solutions for the semiconductor wafer fabrication market. The increase in GES was mainly due to increased shipments of power management products focused on numerous green energy applications. The decrease in Canvys was attributable to lower sales in both the North American and European markets. The increase in Healthcare reflected increases in parts and CT tube sales with a partial offset for decreased equipment sales.

Current wording

During the first nine months of fiscal 2025, consolidated net sales increased 5.3% compared to the first nine months of fiscal 2024. Sales for PMT increased 3.7%, sales for GES increased 26.0%, sales for Canvys decreased 0.4% and sales for Healthcare decreased 4.9%. The increase in PMT was mainly due to increased sales of engineered solutions for the semiconductor wafer fabrication market. The increase in GES was mainly due to increased shipments of power management products focused on numerous green energy applications. The decrease in Canvys was attributable to lower sales in the European markets. The decrease in Healthcare reflected parts, service and equipment sales for eight months due to the January 2025 sale of the majority of Healthcare assets to DirectMed.

Previous wording

Gross profit by segment and percentage of net sales for the second quarter and first six months of fiscal 2025 and fiscal 2024 were as follows (in thousands):

Current wording

Gross profit by segment and percentage of net sales for the third quarter and first nine months of fiscal 2025 and fiscal 2024 were as follows (in thousands):

Previous wording

Consolidated gross profit increased to $15.4 million during the second quarter of fiscal 2025 compared to $12.5 million during the second quarter of fiscal 2024. Consolidated gross margin as a percentage of net sales during the second quarter of fiscal 2025 increased to 31.0% when compared to 28.4% during the second quarter of fiscal 2024. This increase was mainly due to the product mix in PMT, product mix in GES and improved manufacturing absorption in Healthcare with a partial offset from the higher freight costs in Canvys.

Current wording

Consolidated gross profit increased to $16.7 million during the third quarter of fiscal 2025 compared to $15.4 million during the third quarter of fiscal 2024. Consolidated gross margin as a percentage of net sales during the third quarter of fiscal 2025 increased to 31.0% when compared to 29.5% during the third quarter of fiscal 2024. This margin increase was mainly due to favorable product mix in PMT and GES with a partial offset from unfavorable product mix in Canvys and manufacturing under absorption and higher component scrap in Healthcare.

Previous wording

Consolidated 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. Consolidated gross margin as a percentage of net sales during the first six months of fiscal 2025 of 30.8% was unchanged when compared to 30.8% for the first six months of fiscal 2024. Product mix and manufacturing under absorption in PMT, product mix in GES, and higher freight costs in Canvys were offset by favorable mix and improved manufacturing absorption in Healthcare.

Current wording

Consolidated gross profit increased to $48.4 million during the first nine months of fiscal 2025 compared to $45.2 million during the first nine months of fiscal 2024. Consolidated gross margin as a percentage of net sales during the first nine months of fiscal 2025 was 30.8% compared to 30.3% for the first nine months of fiscal 2024. The improved margin was mainly due to favorable product mix in PMT partially offset by manufacturing under absorption, favorable product mix in GES, unfavorable product mix and increased freight costs in Canvys and higher component scrap in Healthcare.

Previous wording

PMT net sales increased 9.9% to $34.4 million during the second quarter of fiscal 2025 from $31.3 million during the second quarter of fiscal 2024. The increase was due to increased sales of electron devices, RF and Microwave components and engineered solutions for the semiconductor wafer fabrication market. Gross margin as a percentage of net sales increased to 30.3% during the second quarter of fiscal 2025 as compared to 28.5% during the second quarter of fiscal 2024 due to product mix.

Current wording

PMT net sales increased 3.7% to $101.8 million during the first nine months of fiscal 2025 from $98.2 million during the first nine months of fiscal 2024. The increase was due primarily to increased sales of engineered solutions for the semiconductor wafer fabrication market. Gross margin as a percentage of net sales increased to 30.3% during the first nine months of fiscal 2025 as compared to 29.8% during the first nine months of fiscal 2024 due to favorable product mix partially offset by manufacturing under absorption.

Previous wording

GES net sales increased 129.0% to $6.0 million during the second quarter of fiscal 2025 from $2.6 million during the second 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 numerous green energy applications. Gross margin as a percentage of net sales increased to 32.0% during the second quarter of fiscal 2025 as compared to 29.2% during the second quarter of fiscal 2024 due to product mix.

Current wording

GES net sales decreased 19.4% to $9.3 million during the third quarter of fiscal 2025 from $11.5 million during the third quarter of fiscal 2024. The decrease reflected the project-based nature of this segment and was mainly due to a large order in the third quarter of fiscal 2024 that did not repeat in fiscal 2025 and a shipping delay on an EV Locomotive order. Gross margin as a percentage of net sales increased to 32.8% during the third quarter of fiscal 2025 as compared to 26.6% during the third quarter of fiscal 2024 due to product mix.

Previous wording

GES net sales increased 100.8% to $14.1 million during the first six months of fiscal 2025 from $7.0 million during the first six months 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 numerous green energy applications. Gross margin as a percentage of net sales decreased to 30.5% during the first six months of fiscal 2025 as compared to 33.4% during the first six months of fiscal 2024 due to product mix.

Current wording

GES net sales increased 26.0% to $23.3 million during the first nine months of fiscal 2025 from $18.5 million during the first nine months of fiscal 2024. The increase was mainly due to increased shipments of power management products focused on numerous green energy applications. Gross margin as a percentage of net sales increased to 31.4 % during the first nine months of fiscal 2025 as compared to 29.2% during the first nine months of fiscal 2024 due to product mix.

Previous wording

Canvys net sales decreased 15.7% to $14.5 million during the first six months of fiscal 2025 from $17.2 million during the first six months of fiscal 2024, due to lower sales in both the North American and European markets. Gross margin as a percentage of net sales decreased to 33.1% during the first six months of fiscal 2025 from 33.8% during the first six months of fiscal 2024 primarily due to increased freight costs.

Current wording

Canvys net sales decreased 0.4% to $23.7 million during the first nine months of fiscal 2025 from $23.8 million during the first nine months of fiscal 2024, due to lower sales in the European markets. Gross margin as a percentage of net sales decreased to 33.1% during the first nine months of fiscal 2025 from 34.0% during the first nine months of fiscal 2024 due to product mix and higher freight costs.

Previous wording

Selling, general and administrative expenses (“SG&A”) increased to $16.0 million for the second quarter of fiscal 2025 when compared to $14.5 million for the year ago quarter. This increase of $1.5 million or 10.4% from the second quarter of fiscal 2024 mainly reflected higher incentives due to sales growth. Expressed as a percentage of net sales, SG&A was 32.3% for the second quarter of fiscal 2025 compared to 32.8% in the second quarter of fiscal 2024.

Current wording

Selling, general and administrative expenses (“SG&A”) increased to $14.5 million for the third quarter of fiscal 2025 when compared to $14.4 million for the year ago quarter. This increase of $0.1 million or less than 1% from the third quarter of fiscal 2024 mainly reflected higher incentives due to sales growth, partially offset by lower R&D and professional service expenses. Expressed as a percentage of net sales, SG&A was 26.9% for the third quarter of fiscal 2025 compared to 27.6% in the third quarter of fiscal 2024.

Previous wording

SG&A increased to $32.1 million for the first six months of fiscal 2025 when compared to $30.3 million for the first six months of fiscal 2024. This increase of $1.8 million or 6.0% from the first six months of fiscal 2024 mainly reflected higher incentives due to sales growth. Expressed as a percentage of net sales, SG&A was 31.1% for the first six months of fiscal 2025 compared to 31.3% for the first six months of fiscal 2024.

Current wording

SG&A increased to $46.6 million for the first nine months of fiscal 2025 when compared to $44.7 million for the first nine months of fiscal 2024. This increase of $1.9 million or 4.2% from the first nine months of fiscal 2024 mainly reflected higher incentives due to sales growth, partially offset by lower R&D expenses. Expressed as a percentage of net sales, SG&A was 29.7% for the first nine months of fiscal 2025 compared to 30.0% for the first nine months of fiscal 2024.

Previous wording

Other expense during the second quarter of fiscal 2025 totaled $0.4 million compared to a $0.3 million expense for the second quarter of fiscal 2024. This increase is due to a $0.1 million increase in foreign exchange losses.

Current wording

Other expense during the third quarter of fiscal 2025 totaled $0.3 million compared to less than a $0.1 million expense for the third quarter of fiscal 2024. This increase was due to a $0.3 million increase in foreign exchange losses.

Previous wording

Other expense during the first six months of fiscal 2025 totaled $0.1 million, unchanged when compared to the first six months of fiscal 2024.

Current wording

Other expense during the first nine months of fiscal 2025 totaled $0.4 million, compared to $0.2 million for the first nine months of fiscal 2024. This increase was primarily due to a $0.3 million increase in foreign exchange losses.

Previous wording

We recorded an income tax benefit of $0.3 million and $0.5 million for the second quarter of fiscal 2025 and the second quarter of fiscal 2024, respectively. The effective income tax rate during the second quarter of fiscal 2025 was 28.8% as compared to 21.6% during the second quarter of fiscal 2024. The difference in rate during the second quarter of fiscal 2025 as compared to the second quarter of fiscal 2024 reflects changes in the geographical distribution of income (loss), which is primarily driven by an increase in U.S. earnings for fiscal 2025 and the state income tax provision, as well as the impact of U.S. research and development credits. The 28.8% effective income tax rate differs from the federal statutory rate of 21% as a result of the geographical distribution of income (loss) and the utilization of the U.S. research and development credit.

Current wording

We recorded an income tax benefit of $1.0 million and an income tax provision of $0.2 million for the third quarter of fiscal 2025 and the third quarter of fiscal 2024, respectively. The effective income tax rate during the third quarter of fiscal 2025 was 33.4% as compared to 23.3% during the third quarter of fiscal 2024. The difference in rate during the third quarter of fiscal 2025 as compared to the third quarter of fiscal 2024 reflects changes in our geographical distribution of income (loss) and the discrete item related to the sale of healthcare assets resulting in a loss in the third quarter of fiscal 2025. The 33.4% 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 book loss on the sale of healthcare assets and the utilization of the U.S. research and development credit.

Previous wording

We recorded an income tax benefit of $0.2 million and $0.1 million for the first six months of fiscal 2025 and the first six months of fiscal 2024, respectively. The effective income tax rate during the first six months of fiscal 2025 was a tax benefit of 60.4% as compared to a tax benefit of 16.5% during the first six months of fiscal 2024. The difference in rate during the first six months of fiscal 2025 as compared to the first six months of fiscal 2024 reflects changes in the geographical distribution of income (loss), which is primarily driven by an increase in U.S. earnings for fiscal 2025 and the state income tax provision, as well as the impact of U.S. research and development credits. The 60.4% effective income tax rate differs from the federal statutory rate of 21% as a result of the geographical distribution of income (loss), as well as the utilization of the U.S. research and development credit.

Current wording

We recorded an income tax benefit of $1.3 million and an income tax provision of $0.1 million for the first nine months of fiscal 2025 and for the first nine months of fiscal 2024, respectively. The effective income tax rate during the first nine months of fiscal 2025 was a tax benefit of 36.5% as compared to a tax provision of 39.2% during the first nine months of fiscal 2024. The difference in rate during the first nine months of fiscal 2025 as compared to the first nine months of fiscal 2024 reflects changes in our geographical distribution of income (loss) and the discrete item related to the sale of healthcare assets resulting in a loss in the third quarter of fiscal 2025. The 36.5% 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 book loss on the sale of healthcare assets and the utilization of the U.S. research and development credit.

Previous 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 Netherlands, years prior to fiscal 2020 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.

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 Netherlands, years prior to fiscal 2020 are closed for examination. We are under examination in Germany for fiscal years 2019 to 2022. During the third quarter of fiscal 2025, we received a notice from the State of Illinois for an income tax audit covering the period from June 2021 to May 2023. We have no other current open audits in the U.S.

Previous wording

The Company recorded $0.3 million for uncertain tax positions as of November 30, 2024 as compared to $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 (Loss) 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 November 30, 2024.

Current wording

The Company recorded $0.3 million for uncertain tax positions as of March 1, 2025 as compared to $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 Unaudited Consolidated Statements of Comprehensive (Loss) 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 March 1, 2025 and June 1, 2024, respectively.

Previous wording

Net Income and Per Share Data

Current wording

Net (Loss) Income and Per Share Data

Previous wording

Net loss during the second quarter of fiscal 2025 was $0.8 million, or $0.05 per diluted common share and $0.05 per Class B diluted common share as compared to a net loss of $1.8 million during the second quarter of fiscal 2024 or $0.13 per diluted common share and $0.12 per Class B diluted common share.

Current wording

Net loss during the third quarter of fiscal 2025 was $2.1 million, or $0.15 per diluted common share and $0.13 per Class B diluted common share as compared to a net income of $0.8 million during the third quarter of fiscal 2024 or $0.05 per diluted common share and $0.05 per Class B diluted common share.

Previous wording

Net loss during the first six months of fiscal 2025 was $0.2 million, or $0.01 per diluted common share and $0.01 per Class B diluted common share as compared to a net loss of $0.6 million during the first six months of fiscal 2024 or $0.04 per diluted common share and $0.04 per Class B diluted common share.

Current wording

Net loss during the first nine months of fiscal 2025 was $2.2 million, or $0.16 per diluted common share and $0.14 per Class B diluted common share as compared to a net income of $0.2 million during the first nine months of fiscal 2024 or $0.01 per diluted common share and $0.01 per Class B diluted common share.

Previous wording

Cash and cash equivalents were $26.6 million at November 30, 2024. Cash and cash equivalents by geographic area at November 30, 2024 consisted of $8.5 million in North America, $8.9 million in Europe, $1.2 million in Latin America and $8.0 million in Asia/Pacific. No cash was repatriated to the United States in the first six months 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.

Current wording

Cash and cash equivalents were $36.7 million at March 1, 2025. Cash and cash equivalents by geographic area on March 1, 2025 consisted of $20.3 million in North America, $8.3 million in Europe, $1.0 million in Latin America and $7.1 million in Asia/Pacific. No cash was repatriated to the United States in the first nine months 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. The January 24, 2025 sale of certain Healthcare assets to DirectMed generated $8.2 million of cash which will be utilized to support opportunities in our Green Energy Solutions business. 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

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. There was no utilization of the credit line during the second quarter of fiscal 2025. As of the end of the second quarter for fiscal 2025 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 and repaid that $1.0 million during the first quarter of fiscal 2025. There was no utilization of the credit line during the second and third quarters of fiscal 2025. As of the end of the third quarter for fiscal 2025 and the date of this report, no amounts were outstanding under the Revolving Credit Facility.

Previous wording

Operating activities generated $5.9 million of cash during the first six months of fiscal 2025. We had a net loss of $0.2 million during the first six months of fiscal 2025, which included non-cash stock-based compensation expense of $0.9 million associated with the issuance of stock option and restricted stock awards, inventory reserve provisions of $0.2 million, unrealized foreign exchange gain of $0.2 million and depreciation and amortization expense of $2.1 million associated with our property, plant and equipment and intangible assets. Changes in our operating assets and liabilities generated $3.2 million in cash during the first six months of fiscal 2025, net of foreign currency exchange gains and losses, included an increase in accounts payable and accrued liabilities of $5.2 million, an increase accounts receivable of $1.1 million and an increase in inventories of $1.7 million. The increase in accounts receivable was primarily due to the higher level of sales. The changes in accounts payable and accrued liabilities were timing related.

Current wording

Operating activities generated $10.5 million of cash during the first nine months of fiscal 2025. We had a net loss of $2.2 million during the first nine months of fiscal 2025, which included non-cash stock-based compensation expense of $1.2 million associated with the issuance of stock option and restricted stock awards, inventory reserve provisions of $0.3 million, unrealized foreign exchange loss of $0.4 million, depreciation and amortization expense of $3.0 million associated with our property, plant and equipment and intangible assets and the disposal loss on Healthcare assets of $4.9 million. Changes in our operating assets and liabilities generated $2.8 million in cash during the first nine months of fiscal 2025, net of foreign currency exchange gains and losses, included an increase in accounts payable and accrued liabilities of $3.1 million, an increase in accounts receivable of $1.5 million and a decrease in inventories of $1.1 million. The increase in accounts receivable was primarily due to the higher level of sales. The changes in accounts payable and accrued liabilities were timing related.

Previous wording

Operating activities generated $1.8 million of cash during the first six months of fiscal 2024. We had a net loss of $0.6 million during the first six months of fiscal 2024, which included non-cash stock-based compensation expense of $0.8 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 $2.1 million associated with our property and equipment as well as amortization of our intangible assets. Changes in our operating assets and liabilities used $0.9 million in cash during the first six months of fiscal 2024, net of foreign currency exchange gains and losses included an increase in inventory of $6.2 million, a decrease in accounts payable of $1.1 million and an increase in prepayments of $0.2 million. Partially offsetting the cash utilization was a decrease in receivables of $6.3 million and an increase in accrued liabilities of $0.4 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 GES. The changes in accounts payable and accrued liabilities were timing related.

Current 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.

Previous wording

Cash used in investing activities of $1.4 million during the first six 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").

Current wording

Cash provided by investing activities of $5.0 million during the first nine months of fiscal 2025 was due to the $7.0 million of proceeds from the disposal of Healthcare assets and $2.0 million offset for capital expenditures. Capital expenditures were primarily related to our IT system and LaFox manufacturing and facilities. LaFox manufacturing primarily supports the Electron Device Group and Green Energy Solutions.