Richardson Electronics, Ltd.

Good day, everyone. Thank you for standing by. Welcome to the Richardson Electronics Earnings Call for the fourth quarter of fiscal year 2025. At this time, all participants on the listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press star 1-1 on your telephone. You will then hear an automated message advising your hand is raised. Please note that today's conference may be recorded. I will now hand the conference over to your speaker, Mr. Ed Richardson. Please go ahead, sir.

Good morning, and thank you all for joining Richardson Electronics Conference Call for the fourth quarter of fiscal year 2025. We appreciate your continued support and interest in Richardson Electronics. Joining me today are Bob Ben, Chief Financial Officer, Wendy Dadel, Chief Operating Officer, Greg Pellequin, General Manager of our Power and Microwave Technologies Group, which includes Green Energy Solutions, and Jens Rupert, General Manager of Canvas. Today's comments include GAP and non-GAP financial resorts. A detailed reconciliation between GAP and non-GAP results can be found in yesterday's press release. As a reminder, this call is being recorded and will be available for playback. I'd also like to remind you that we will be making forward looking statements. They're based on current expectations and involve risks and uncertainties. Therefore, our actual results could be materially different. Please refer to our press release and SEC filings for an explanation of our risk factors. I'm pleased with our performance in fiscal 2025 as our financial results improved throughout the year, excluding the loss of $1.5 billion in the sale of the health care assets. And we ended the fiscal year with the four consecutive quarters of -over-year sales growth and five consecutive quarters of positive operating cash flow. Our performance is especially noteworthy as we navigated a difficult global environment, which I believe reflects the hard work of our team and the value we provide our global customer base. Throughout the fiscal year, we faced elevated inflation in key markets, ongoing supply chain pressures, and a growing global instability. Particularly in Europe and Asia, nonetheless, Richardson Electronics has remained focused, agile, and committed to our long-term vision. Given our well-established global infrastructure, we're well-positioned to minimize the impact of the ongoing tariff negotiations and other market constraints. In FY25, Q4 total sales were $51.9 million, up from $47.4 million in Q4 of last year. While some headwinds impacted our ability to meet forecasted targets, we did see strong -over-year growth in all three of our business units. PMT delivered notable sales growth -over-year, driven by continued strength in our semiconductor and RF power segments. Green energy was up over the prior year due to increased demand for our wind turbine modules, and Canvas posted another solid quarter, exceeding both plan and prior year performance. Importantly, FY25 Q4 gross margin improved 50 basis points to 31.6%, reflecting disciplined pricing strategies and operational improvements. Particularly in PMT, our semiconductor wafer fab business. We're also pleased to report positive operating income for the fourth quarter compared to an operating loss in the same period last year. We continue to manage SG&A carefully while investing to attract and develop proven talent across our organization. In addition, we continue to pursue compelling growth opportunities supported by our strategic plan. Our cash position remains strong at $35.9 million, providing us with flexibility to support both our ongoing operations and strategic growth opportunities. Before we discuss business unit details, I'll turn the call over to Bob Bin, our chief financial officer, who will provide a detailed review of our fourth quarter and full financial results and capital positions. Following Bob's remarks, Greg and Jens will provide updates on our business unit performance, and then Wendy will follow up with comments on our future growth strategies.

Thank you, Ed, and good morning. I will review our financial results for our fourth quarter in fiscal year 2025, followed by a review of our cash position. In addition, please note that I will be discussing non-GAAP financial measures. A reconciliation of non-GAAP items to the comparable GAAP measures is available in our fourth quarter fiscal year 2025 press release that was issued yesterday. Consolidated net sales for the fourth quarter of fiscal 2025 increased .5% to $51.9 million compared to net sales of $47.4 million in the prior year's fourth quarter. This was our fourth consecutive quarterly year over year increase in sales. Fourth quarter net sales growth was led by a .8% increase in PMT sales, which was due to higher demand from the company's semiconductor wafer fab customers and distributed products for RF and microwave applications. Also, we experienced a .1% increase in our GES business unit and a .1% increase in sales for Canvas, which reflected improved market conditions in Europe. Sales growth for the fourth quarter fiscal 2025 was partially offset by a 2.4 million decrease in health care sales that resulted from lower net sales after the sale of the majority of health care assets in January 2025. Consolidated gross margin for the fourth quarter was .6% of net sales compared to .1% during the fourth quarter of fiscal 2024. The 50 basis point increase in consolidated gross margin was primarily due to margin expansion in both PMT and GES. PMT's gross margin increased to .5% from .1% as a result of an improved product mix. GES gross margin increased to .6% from 25.5%, also due to product mix. Lower gross margin for both Canvas and health care partially offset the improvement in consolidated gross margin. Operating expenses as a percentage in net sales improved to .0% for the fourth quarter fiscal 2025 compared to .3% in the fourth quarter fiscal 2024. Loss on disposal of assets of 0.2 million resulted from a closing adjustment to the sale of the majority of health care assets on January 24, 2025. In future periods, health care's financial results will no longer be a standalone segment and will be consolidated into the company's PMT business unit. Operating income was 0.6 million, and non-GAAP operating income was 0.8 million for the fourth quarter fiscal 2025 compared to an operating loss of 0.1 million in the prior year's fourth quarter. Net income was 1.1 million, and non-GAAP net income was 1.8 million for the fourth quarter of fiscal 2025 compared to a net loss of 0.1 million and a non-GAAP net income of 0.3 million in the fourth quarter fiscal 2024. Earnings per common share diluted were 8 cents, and non-GAAP earnings per common share diluted were 12 cents in the fourth quarter fiscal 2025 compared to loss per common share diluted of a penny and non-GAAP earnings per common share diluted of 2 cents in the fourth quarter of fiscal 2024. EBITDA for the fourth quarter fiscal 2025 was 2.9 million. EBITDA after excluding the additional loss on the sale of health care assets or adjusted EBITDA was 3.1 million versus 1.0 million in the prior year's fourth quarter. Turning to a review of the results for fiscal year 2025, net sales for fiscal year 2025 were 208.9 million, an increase of .3% from 196.5 million in fiscal year 2024, which primarily reflected higher sales in PMT and GES. Gross margin was .0% in net sales, which was 50 basis points higher than fiscal 2024, primarily due to product mix. As a percentage in net sales, operating expenses for the fiscal year were .8% compared to .3% for the prior fiscal year. Loss on disposal of health care assets was 5.1 million for fiscal year 2025. Operating loss was 2.5 million and non-GAAP operating income was 2.6 million during fiscal 2025 compared to operating income of 0.3 million during fiscal 2024. Net loss was 1.1 million and non-GAAP net income was 3.2 million for fiscal 2025 versus net income of 0.1 million and non-GAAP net income of 0.5 million during fiscal 2024. Net loss per common share diluted was 8 cents and non-GAAP earnings per common share diluted was 22 cents for fiscal 2025. Compared to 0 cents earnings per common share diluted and non-GAAP earnings per common share diluted of 3 cents for fiscal 2024. EBITDA for fiscal 2025 was 2.5 million. Adjusted EBITDA was 7.5 million versus 4.5 million in the prior year. Moving to a review of our cash position. Cash and cash equivalents at the end of fiscal 2025 were 35.9 million compared to 36.7 million at the end of the third quarter of fiscal 2025 and 24.3 million at the end of fiscal 2024. Cash flow provided from operations was 10.6 million compared to cash flow provided from operations of 6.5 million in the prior year. Capital expenditures of 0.8 million in the fourth quarter fiscal 2025 were primarily related to our manufacturing business facility improvements and IT systems versus 1.0 million in the fourth quarter fiscal year 2024. Total capital expenditures were 2.8 million in fiscal 2025 as compared to 4.0 million in fiscal 2024. As a result, we are pleased to report free cash flow was 7.7 million in fiscal 2025. We paid 0.9 million in the fourth quarter and 3.4 million in fiscal year 2025 for cash dividends. In addition, based on our current financial position, our board of directors declared a regular quarterly cash dividend of six cents per common share, which will be paid in the first quarter of fiscal year 2026. As of the end of fiscal 2025, the company had no outstanding debt on its 30 million revolving line of credit with PNC Bank. Now I will turn the call over to Greg, who will provide more details for our PMT and GES business groups.