Richardson Electronics, Ltd.

Greg, and good morning, everyone. Canvas engineers, manufacturers, and sales custom displays to original equipment manufacturers across global industrial and medical markets. It is our mission to deliver high-quality display solutions tailored to our customers' needs. Canvas reported revenue of $8.3 million in the first quarter of fiscal year 2026, an increase from $7.6 million in the same quarter of the previous year. Our gross margin as a percentage of net sales decreased to 30.9% from 34.3% in the first quarter of fiscal year 25, primarily due to product mix and higher inbound freight costs. The backlog at the end of the first quarter of fiscal 2026 remains strong at 38.4 million, providing a robust foundation for future business. During this most recent quarter, Canvas secured orders from both repeat and new medical OEM customers for a range of applications. Our primary focus remains on robotic-assisted surgery, navigation, endoscopy, and human-machine interface solutions for the control of medical devices. Furthermore, our solutions are widely utilized in various commercial and industrial applications. For instance, our products enhance passenger information systems in trains and buses and improve HMI technologies used in printing, vending, milling, and packaging equipment. Our initiatives focus on increasing Canvas' visibility and market leadership by seeking new opportunities, building customer relationships, and collaborating within the industry to drive growth. Looking ahead, while the business is still project-focused and can therefore vary quarter over quarter, we are cautiously optimistic about improving demand in our markets. Positive indicators such as increasing requests for quotes and encouraging customer feedback suggest steady growth. Our dedicated sales team continues to explore new opportunities while I focus on implementing strategic plans to ensure sustainable growth and deliver long-term value for our shareholders. I will now turn the call over to Wendy.

Thank you, Jens, and good morning, everyone.

While our healthcare business is now included in PMT, I want to provide some additional color as we go through this transition period over the next several quarters. As a reminder, we sell CT tubes exclusively to DirectMed as provided under the terms of the January 2025 sale and distribution agreements. I am pleased to convey we are making excellent progress finalizing production of our Alta tubes. We've also made good strides over the last quarter validating new equipment and materials required to improve our processes for the prepared Siemens tube types. Comparable healthcare sales throughout most of FY26 will be lower than prior year, given DirectMed acquired the healthcare parts business. The sale concluded in January 2025, so this unfavorable comp will continue through Q3 FY26. We anticipate the financial impact of the retained CT tube business will turn positive in the fourth quarter of FY26 or shortly thereafter. Last quarter, after the sale of Richardson Healthcare, we discussed our focus on accelerating growth and improving efficiency. In the first quarter, we were pleased to see year-over-year growth in PMT and Canvas, as well as the wind energy portion of GES, reflecting our ongoing investments in these sectors. Of particular importance is the success we continue to see with our engineered solutions growth strategy. We also see some initial benefits from the Big Beautiful Bill. There are implications in the bill that are fostering wind turbine repowers, which lift sales of our wind turbine modules, as well as sales of products from our technology partners. Wind management companies need to upgrade their towers to receive comparable tax benefits in coming years. In the quarter, we announced our participation in the REV Illinois program. which provides significant tax credits in return for investment in alternative energy technology development in the state of Illinois. We're making progress developing a world-class battery energy storage demonstration site at our LaFox facility. As we've mentioned before, the demand for battery energy storage continues to accelerate, and our turnkey solutions position us to capitalize on that growth. Our Made in America marketing campaign recently kicked off with the addition of a dedicated business development manager. We are highlighting our capabilities on our website and through trade show attendance. In addition, we are leveraging our existing sales organization and global customer relationships throughout the company. Finally, we are seeing increasing demand for our engineered solutions in the semiconductor wafer fab equipment market. Our large customers in this segment indicate sustained growth relating to the ongoing benefit of AI on equipment demand throughout the world. Rest assured the management team remains focused on efficiency and cash generation as well. The end of the significant inventory growth in support of one of our largest suppliers who will soon terminate production of power grid tubes is in sight. In this regard, we are working closely with other partners to ensure ongoing sources of supply but we are in a good inventory position to execute this strategy over several years. Longer term, we remain committed to driving growth both organically and through strategic acquisitions. We're being thoughtful in our approach. We are looking for the right opportunities to utilize our capabilities and accelerate our growth while making full use of our global infrastructure. We believe our current strategic initiatives will drive revenue and profitability growth over the next several years, while we consider longer term strategic acquisitions that further enhance our business. I will now turn the call back to Ed.