Richardson Electronics Reports Q3 Fiscal 2025 Net Loss of $2.1 Million Amid Asset Disposal

Richardson Electronics, Ltd. reported its financial results for the third quarter and first nine months of fiscal 2025, revealing a net loss of $2.1 million for the quarter ending March 1, 2025, compared to a net income of $0.8 million for the same period in the previous year. For the nine-month period, the company recorded a net loss of $2.2 million, a decline from a net income of $0.2 million in the prior year. The company's net sales for the third quarter increased by 2.7% to $53.8 million, up from $52.4 million in the same quarter last year, while year-to-date sales rose 5.3% to $157.0 million from $149.1 million.

The financial performance was impacted by a significant loss of $4.9 million related to the disposal of healthcare assets, which included the sale of a substantial portion of the company's Healthcare business to DirectMed Imaging, LLC on January 24, 2025. This transaction involved an initial consideration of $8.2 million and resulted in a loss due to the write-down of inventory and impairment of property, plant, and equipment. The operating loss for the third quarter was $2.7 million, a stark contrast to the operating income of $1.0 million reported in the same quarter of the previous year.

In terms of segment performance, the Power and Microwave Technologies (PMT) segment saw a 6.6% increase in sales to $33.2 million, driven by higher demand for engineered solutions in the semiconductor market. Conversely, the Green Energy Solutions (GES) segment experienced a 19.4% decline in sales, primarily due to the absence of a large order that had been fulfilled in the previous year. The Canvys segment reported a notable 39.5% increase in sales, while the Healthcare segment's sales fell by 32.3% due to the asset sale, which limited the sales period reflected in the current results.

Operationally, Richardson Electronics maintained a strong cash position, with cash and cash equivalents totaling $36.7 million as of March 1, 2025, compared to $24.3 million at the end of the previous fiscal year. The company generated $10.5 million in cash from operating activities during the first nine months of fiscal 2025, despite the net loss, aided by adjustments for non-cash items and changes in working capital. Looking ahead, the company anticipates that its existing liquidity, including cash reserves and a revolving credit facility, will be sufficient to meet its operational and capital needs over the next twelve months.