RICHARDSON ELECTRONICS, LTD.
For the period ended Aug 30, 2025. Filed Oct 9, 2025.
View on SEC.govAbout this filing
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 30, 2025 · Filed Oct 9, 2025
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 2025-03-01; filed 2025-04-10.
0000950170-25-052737
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2025-08-30; filed 2025-10-09.
0001193125-25-235681
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 96 previous paragraphs and 74 current paragraphs.
33 unchanged; 33 reworded; 8 added; 29 removed; 1 previous and 0 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 (8)
Current report
Some of the Company's products are manufactured in foreign countries and imported into the United States. Accordingly, the Company’s operations are subject to tariffs and other trade protection measures. The U.S. administration has instituted certain changes, and may make additional changes, in trade policies that include the negotiation or termination of trade agreements, higher tariffs on imports into the U.S., and other measures affecting trade between the U.S. and other countries from which the Company imports. Due in part to these measures, some countries are changing their trade policies relating to goods imported from the U.S. These global trade disruptions and geopolitical tensions, together with any related downturns in the global economy, could dampen customer demand, increase market volatility, and impact currency exchange rates, all which could materially and adversely affect the Company’s financial performance.
Current report
The impact of these changes in trade policies will depend on various factors, including (i) when trade measures are implemented, (ii) the ultimate amount, scope, nature, and duration of tariffs and other trade measures, and (iii) the extent to which the Company can mitigate impacts and pass on any increased costs associated with these changes. In addition, the impact of trade disruptions on general economic conditions and demand for electronic components is difficult to predict.
Current report
Net income during the first quarter of fiscal 2026 was $1.9 million compared to a net income of $0.6 million during the first quarter of fiscal 2025.
Current report
Other income during the first quarter of fiscal 2026 totaled $1.4 million compared to $0.3 million for first quarter of fiscal 2025. The increase from the year ago quarter was mainly due to a non-recurring gain of $0.9 million.
Current report
The Company maintains a valuation allowance representing the portion of the deferred tax asset that management does not believe is more likely than not to be realized. The valuation allowance was $2.9 million as of August 30, 2025 and $2.8 million as of May 31, 2025. The valuation allowance relates to state NOLs ($1.7 million) and deferred tax assets in foreign jurisdictions where historical taxable losses have been incurred ($1.2 million). The amount of the deferred tax asset considered realizable, however, could be adjusted if estimates of future taxable income during the carryforward period are increased, or if objective negative evidence in the form of cumulative losses is no longer present and additional weight may be given to subjective evidence such as our projections for growth.
Current report
We have considered the impact of the One Big Beautiful Bill Act("OBBBA") on the Company’s annual effective tax rate. The impact of OBBBA on the annual effective tax rate includes the reduction in the research and development credit from the Section 280c election. These changes did not have a significant impact to the annual effective tax rate. However, the enactment of the OBBBA introduced several significant tax law modifications that, while not affecting the annual effective tax rate, do have other implications for the Company. The OBBBA makes permanent key elements of the 2017 Tax Cuts and Jobs Act, including 100% bonus depreciation and domestic research cost expensing pursuant to IRC §174 for fiscal years beginning after December 31, 2024. The Company is currently evaluating the future impact of OBBA on its financial position and these changes are anticipated to have an impact on the results of operations and cash flows.
Current report
On October 7, 2025, the Company executed a three-year extension to the Credit Agreement through the Second Amendment to the Credit Agreement with a maximum borrowing limit of $20 million. The terms of the new agreement are similar to the previous Credit Agreement. See Note 5, Revolving Credit Facility, included in Part I, Item 1 for further information.
Current report
The preparation of financial statements in conformity with United States Generally Accepted Accounting Principles ("GAAP”) and pursuant to the rules and regulations of the SEC, we make assumptions, judgments and estimates that affect the reported amounts of assets, liabilities, revenue and expenses and the related disclosures of contingent assets and liabilities. Our assumptions, judgments and estimates are based on historical experience and various other factors deemed relevant. Actual results could be materially different from those estimates under different assumptions or conditions. We evaluate our assumptions, judgments and estimates on a regular basis. We also discuss our critical accounting estimates with the Audit Committee of the Board of Directors.
Removed paragraphs (29)
Previous report
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 report
On January 24, 2025, the Company sold a substantial portion of its Healthcare assets to DirectMed Imaging, LLC (“DirectMed”) and entered into an exclusive 10-year global supply agreement in which Richardson will supply DirectMed with repaired Siemens CT X-ray tubes. Additionally, the Company will continue manufacturing ALTA CT X-ray tubes for DirectMed for approximately 12 to 18 months. This transaction resulted in loss of $4.9 million. Refer to Note 10, Disposal of Healthcare Assets and Related Charges, in Part I, Item 1 for transaction details.
Previous report
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 report
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 report
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 report
The disposal of certain Healthcare assets generated a loss of $4.9 million for the third quarter of fiscal 2025.
Previous report
Net loss during the third quarter of fiscal 2025 was $2.1 million compared to a net income of $0.8 million during the third quarter of fiscal 2024.
Previous report
Financial Summary – Nine Months Ended March 1, 2025
Previous report
The first nine months of fiscal 2025 contained 39 weeks and the first nine months of fiscal 2024 contained 40 weeks.
Previous report
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 report
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 report
The disposal of certain Healthcare assets generated a loss of $4.9 million for the first nine months of fiscal 2025.
Previous report
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 report
Net loss during the first nine months of fiscal 2025 was $2.2 million compared to a net income of $0.2 million during the first nine months of fiscal 2024.
Previous report
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 report
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 report
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 report
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 report
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 report
Healthcare
Previous report
Healthcare net sales decreased 32.3% to $2.1 million during the third quarter of fiscal 2025 from $3.1 million during the third quarter of fiscal 2024. With the sale to DirectMed on January 24, 2025, the third quarter sales for fiscal 2025 only reflected parts, service and equipment sales for two months. Gross margin as a percentage of net sales decreased to 15.5% during the third quarter of fiscal 2025 as compared to 41.6% during the third quarter of fiscal 2024 primarily due to manufacturing under absorption resulting from equipment downtime and higher component scrap expense.
Previous report
Healthcare net sales decreased 4.9% to $8.2 million during the first nine months of fiscal 2025 from $8.6 million during the first nine months of fiscal 2024. With the sale to DirectMed on January 24, 2025, sales for first nine months of fiscal 2025 only reflected parts, service and equipment sales for eight months. Gross margin as a percentage of net sales decreased to 29.0% during the first nine months of fiscal 2025 as compared to 29.5% during the first nine months of fiscal 2024 primarily due to higher component scrap expense.
Previous report
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 report
Disposal of Healthcare Assets
Previous report
A substantial portion of Healthcare assets were sold to DirectMed on January 24, 2025 that resulted in a total loss of $4.9 million for the third quarter and first nine months of fiscal 2025. The loss on assets sold to DirectMed totaled $3.0 million and the Company recorded an impairment charge of $1.9 million for inventory and fixed assets. Refer to Note 10, Disposal of Healthcare Assetsand Related Charges, in Part I, Item 1 for more details.
Previous report
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 report
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 report
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 report
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.
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,” “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.
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 armed conflicts in Europe and the Middle East; 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 4, 2025. 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 month and nine month periods ended March 1, 2025 and March 2, 2024, 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 periods ended August 30, 2025 and August 31, 2024, 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 1, 2025 and March 2, 2024, 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 three month periods ended August 30, 2025 and August 31, 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, 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.
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. More than 55% 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
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.
Current wording
The recent tariff modifications did not materially impact our results for the first quarter of fiscal 2026. However, it is possible that further tariffs may be imposed on imports of our products, including by other countries, or that our business will be impacted by changing trade relations among countries. Management continues to work with its suppliers as well as its customers to mitigate the impact of the tariffs on our customers’ 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.
Previous wording
Power and Microwave Technologies ("PMT")combines our core engineered solutions capabilities, power grid and microwave tube business with new disruptive RF, Wireless and Power technologies. As a designer, manufacturer, technology partner and authorized distributor, PMT’s strategy is to provide specialized technical expertise and engineered solutions based on our core engineering and manufacturing capabilities on a global basis. We provide solutions and add value through design-in support, systems integration, prototype design and manufacturing, testing, logistics and aftermarket technical service and repair - all through our existing global infrastructure. PMT’s focus is on products for power, RF and microwave applications for customers in 5G, aviation, broadcast, communications, industrial, marine, medical, military, scientific and semiconductor markets. PMT focuses on various applications including broadcast transmission, CO2 laser cutting, diagnostic imaging, dielectric and induction heating, high energy transfer, high voltage switching, plasma, power conversion, radar and radiation oncology. PMT also offers its customers technical services for both microwave and industrial equipment.
Current wording
Power and Microwave Technologies ("PMT")combines our core engineered solutions capabilities, power grid and microwave tube business with new disruptive RF, Wireless and Power technologies. As a designer, manufacturer, technology partner and authorized distributor, PMT’s strategy is to provide specialized technical expertise and engineered solutions based on our core engineering and manufacturing capabilities on a global basis. We provide solutions and add value through design-in support, systems integration, prototype design and manufacturing, testing, logistics and aftermarket technical service and repair - all through our existing global infrastructure. PMT’s focus is on products for power, RF and microwave applications for customers in 5G, aviation, broadcast, communications, industrial, marine, medical, military, scientific and semiconductor markets. PMT focuses on various applications including broadcast transmission, CO2 laser cutting, diagnostic imaging, dielectric and induction heating, high energy transfer, high voltage switching, plasma, power conversion, radar and radiation oncology. PMT also offers its customers technical services for both microwave and industrial equipment. After the sale of certain assets to DirectMed, the Company continues to manufacture and repair certain CT tubes and sells them exclusively to DirectMed pursuant to a supply agreement.
Previous wording
The third quarter of fiscal 2025 and fiscal 2024 both contained 13 weeks.
Current wording
The first quarter of fiscal 2026 and fiscal 2025 both contained 13 weeks.
Previous 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.
Current wording
Net sales during the first quarter of fiscal 2026 were $54.6 million, an increase of 1.6%, compared to net sales of $53.7 million during the first quarter of fiscal 2025.
Previous 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.
Current wording
Gross margin increased to 31.0% during the first quarter of fiscal 2026 compared to 30.6% during the first quarter of fiscal 2025.
Previous wording
Selling, general and administrative expenses were $46.6 million or 29.7% of net sales during the first nine months of fiscal 2025 compared to $44.7 million or 30.0% of net sales during the first nine months of fiscal 2024.
Current wording
Selling, general and administrative expenses were $16.0 million or 29.2% of net sales during the first quarter of fiscal 2026 compared to $16.1 million or 30.0% of net sales during the first quarter of fiscal 2025.
Previous 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.
Current wording
Operating income during the first quarter of fiscal 2026 was $1.0 million compared to an operating income of $0.3 million during the first quarter of fiscal 2025.
Previous 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):
Current wording
Net sales by segment and percentage change during the first quarter of fiscal 2026 and fiscal 2025 were as follows (in thousands):
Previous 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.
Current wording
During the first quarter of fiscal 2026, consolidated net sales increased 1.6% compared to the first quarter of fiscal 2025. Sales for PMT increased 2.8%, sales for GES decreased 10.2% and sales for Canvys increased 8.3%. The increase in PMT was mainly due to increased semiconductor and electron tube products. The decrease in GES reflected the project-based nature of this segment and was mainly due to the non-recurrence of a large EV Locomotive order from the year ago quarter. The increase in Canvys was attributable to sales in the European markets.
Previous 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):
Current wording
Gross profit by segment and percentage of net sales for the first quarter of fiscal 2026 and fiscal 2025 were as follows (in thousands):
Previous 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.
Current wording
Consolidated gross profit increased to $16.9 million during the first quarter of fiscal 2026 compared to $16.4 million during the first quarter of fiscal 2025. Consolidated gross margin as a percentage of net sales during the first quarter of fiscal 2026 increased to 31.0% when compared to 30.6% during the first quarter of fiscal 2025. This margin increase was mainly due to favorable product mix and improved manufacturing absorption in PMT and favorable product mix in GES with a partial offset from unfavorable product mix and higher freight costs in Canvys.
Previous wording
PMT net sales increased 6.6% to $33.2 million during the third quarter of fiscal 2025 from $31.2 million during the third quarter 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 30.8% during the third quarter of fiscal 2025 as compared to 28.3% during the third quarter of fiscal 2024 due to product mix.
Current wording
PMT net sales increased 2.8% to $39.1 million during the first quarter of fiscal 2026 from $38.0 million during the first quarter of fiscal 2025. The increase was due primarily to increased sales of engineered solutions for the semiconductor wafer fabrication market and higher sales of electron tubes. The decline in healthcare sales, which only include CT tubes, was due to the sale of assets to DirectMed in the third quarter of fiscal 2025, partially offset the sales growth for semiconductor and electron tube products. Gross margin as a percentage of net sales increased to 31.3% during the first quarter of fiscal 2026 as compared to 30.1% during the first quarter of fiscal 2025 due to product mix and improved manufacturing absorption.
Previous 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.
Current wording
GES net sales decreased 10.2% to $7.2 million during the first quarter of fiscal 2026 from $8.1 million during the first quarter of fiscal 2025. The decrease reflected the project-based nature of this segment and was mainly due to a large EV Locomotive order in the first quarter of 2025 that did not repeat in the first quarter of 2026. Gross margin as a percentage of net sales increased to 29.6% during the first quarter of fiscal 2026 as compared to 29.4% during the first quarter of fiscal 2025 due to product mix.
Previous wording
Canvys net sales increased 39.5% to $9.2 million during the third quarter of fiscal 2025 from $6.6 million during the third quarter of fiscal 2024, due to higher sales in the North American markets. Gross margin as a percentage of net sales decreased to 33.2% during the third quarter of fiscal 2025 from 34.4% during the third quarter of fiscal 2024 primarily due to product mix.
Current wording
Canvys net sales increased 8.3% to $8.3 million during the first quarter of fiscal 2026 from $7.6 million during the first quarter of fiscal 2025, due to higher sales in the European markets. Gross margin as a percentage of net sales decreased to 30.9% during the first quarter of fiscal 2026 from 34.3% during the first quarter of fiscal 2025 primarily due to product mix and higher freight costs.
Previous 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.
Current wording
Selling, general and administrative expenses (“SG&A”) decreased to $16.0 million for the first quarter of fiscal 2026 when compared to $16.1 million for the year ago quarter. This decrease of $0.1 million or less than 1% from the first quarter of fiscal 2025 mainly reflected lower travel costs. Expressed as a percentage of net sales, SG&A was 29.2% for the first quarter of fiscal 2026 compared to 30.0% in the first quarter of fiscal 2025.
Previous 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.
Current wording
We recorded an income tax provision of $0.4 million and $0.1 million for the first three months of fiscal 2026 and the first three months of fiscal 2025, respectively. The effective income tax rate during the first three months of fiscal 2026 was a tax provision of 18.1% as compared to a tax provision of 9.0% during the first three months of fiscal 2025. The difference in rate during the first three months of fiscal 2026 as compared to the first three months of fiscal 2025 reflects changes in our geographical distribution of income (loss). The 18.1% effective income tax rate differs from the federal statutory rate of 21% as a result of our geographical distribution of income (loss) and the utilization of the U.S. research and development credit.
Previous 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.
Current wording
The Company recorded a $0.3 million uncertain tax position as of August 30, 2025 as compared to $0.3 million as of May 31, 2025. 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 as of August 30, 2025 and May 31, 2025.
Previous wording
Net (Loss) Income and Per Share Data
Current wording
Net Income and Per Share Data
Previous 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.
Current wording
Net income during the first quarter of fiscal 2026 was $1.9 million, or $0.13 per diluted common share and $0.12 per Class B diluted common share as compared to a net income of $0.6 million during the first quarter of fiscal 2025 or $0.04 per diluted common share and $0.04 per Class B diluted common share.
Previous 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.
Current wording
Cash and cash equivalents were $35.7 million at August 30, 2025. Cash and cash equivalents by geographic area on August 30, 2025 consisted of $16.5 million in North America, $10.1 million in Europe, $1.0 million in Latin America and $8.1 million in Asia/Pacific. No cash was repatriated to the United States in the first three months of fiscal 2026. 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 9, Income Taxes, of the notes to our consolidated financial statements in Part II, Item 8 of our Annual Report on Form 10-K for the fiscal year ended May 31, 2025, filed with the SEC on August 4, 2025, for further information.
Previous 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.
Current wording
Cash and cash equivalents were $35.9 million at May 31, 2025. Cash and cash equivalents by geographic area at May 31, 2025 consisted of $19.5 million in North America, $7.7 million in Europe, $0.9 million in Latin America and $7.8 million in Asia/Pacific. No cash was repatriated to the United States in fiscal 2025.
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 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.
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 N. A. This Credit Agreement was amended by the First Amendment to the Credit Agreement dated April 9, 2025. The Revolving Credit Facility is guaranteed by the Company's domestic subsidiaries. Proceeds of the borrowings under the Revolving Credit Facility, if any, are expected to be used for working capital and general corporate purposes of the Company and its subsidiaries. There were no drawings or repayments under the Revolving Credit Facility as of August 30, 2025 and through the report release date. As of August 30, 2025 and through the report release date, no amounts were outstanding under the Revolving Credit Facility.
Previous wording
Cash flows from operating activities are primarily a result of our net income (loss) adjusted for non-cash items and changes in our operating assets and liabilities.
Current wording
Cash flows from operating activities are primarily a result of our net income adjusted for non-cash items and changes in our operating assets and liabilities.
Previous 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.
Current wording
Operating activities generated $1.4 million of cash during the first three months of fiscal 2026. We had a net income of $1.9 million during the first three months of fiscal 2026, which included non-cash share-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 $0.5 million, 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 utilized $1.8 million in cash during the first three months of fiscal 2026, net of foreign currency exchange gains and losses, included an increase in accounts receivable of $2.7 million, an increase in inventories of $0.6 million and an increase in accounts payable and accrued liabilities of $1.5 million. The increase in accounts receivable was primarily due to the higher level of sales compared to the fourth quarter of fiscal 2025. The change in accounts payable and accrued liabilities was 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 $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 share-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
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 and Green Energy Solutions.
Current wording
Cash used in investing activities of $1.0 million during the first three months of fiscal 2026 was due to capital expenditures. Capital expenditures were primarily related to our IT system and LaFox manufacturing and facilities. LaFox manufacturing primarily supports the PMT and GES segments.
Previous 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.
Current wording
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 PMT and GES segments.
Previous wording
Cash used by financing activities of $2.4 million during the first nine months of fiscal 2025 primarily resulted from $2.6 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 2026 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 used by 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.
Rearranged previous paragraphs (1)
Previous report — wording carried elsewhere
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.