Richardson Electronics reports steady growth in Q3 FY2025

LAFOX, Ill. - Richardson Electronics, Ltd. (NASDAQ: RELL), currently trading at $9.74 with a market capitalization of $141 million, has announced its financial results for the third quarter of fiscal year 2025, which ended on March 1, 2025. According to InvestingPro analysis, the company's current valuation indicates it is slightly undervalued based on its Fair Value assessment. The company saw a 2.7% increase in net sales year-over-year, reaching $53.8 million, attributed to higher demand in the Power and Microwave Technologies Group (PMT) and Canvys segments. PMT sales rose by 6.6%, while Canvys experienced a 39.5% increase due to improved market conditions in North America.

Despite a one-time $4.9 million charge from the sale of most of its Healthcare assets, Richardson Electronics achieved positive operating cash flow for the fourth consecutive quarter, ending with no debt and $36.7 million in cash and equivalents. InvestingPro data shows the company maintains a healthy current ratio of 4.51, with liquid assets well exceeding short-term obligations, and has maintained consistent dividend payments for 38 consecutive years. Excluding this charge, non-GAAP operating income for the quarter was $2.2 million, up from $1.0 million the previous year.

The asset sale is part of the company's strategy to streamline operations and focus on higher growth, higher margin market opportunities, particularly in the Green Energy Solutions (GES) segment. However, GES sales declined by 19.4% due to lower sales of wind turbine battery modules, which vary by quarter.

Richardson Electronics also declared a $0.06 per share quarterly cash dividend, payable on May 28, 2025, to shareholders of record as of May 9, 2025.

For the nine-month period ending March 1, 2025, net sales increased by 5.3% to $157.0 million. The company reported a net loss of $2.1 million for the quarter and a non-GAAP net income of $1.6 million, compared to a net income of $0.8 million in the same quarter of the previous year.

The company's financial performance reflects its ongoing efforts to adapt to the dynamic macro environment and leverage its strong balance sheet to pursue strategic business opportunities. The reported financial figures are based on a press release statement from Richardson Electronics. For deeper insights into RELL's financial health, valuation metrics, and 12+ additional ProTips, investors can access the comprehensive Pro Research Report available on InvestingPro, which provides detailed analysis of this and 1,400+ other US stocks.

In other recent news, Richardson Electronics has seen significant developments impacting its market presence. DirectMed Imaging announced the acquisition of Richardson Healthcare's Fort Mill, SC operation, a move that expands DirectMed's inventory and expertise in Canon/Toshiba MRI and CT parts. This acquisition also positions DirectMed as the exclusive global distributor for Richardson Electronics' repaired Siemens Straton Z, MX, and MXP CT X-ray tubes, as well as the ALTA750 and ALTA750G CT X-ray tubes. This strategic partnership is expected to enhance DirectMed's offerings and provide innovative solutions to its customers.

Additionally, Northland analysts recently downgraded Richardson Electronics' stock rating from Outperform to Market Perform, while maintaining a price target of $15.00. This decision follows a notable increase in the company's share value, driven by a recovery in demand for its Grid Energy Solutions and Power Management Technology products. Despite recognizing the potential in the GES market, Northland analysts have opted for a cautious approach, awaiting more concrete financial results. These recent developments reflect Richardson Electronics' ongoing efforts to navigate opportunities and challenges within its industry.

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