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What changed in RICHARDSON ELECTRONICS, LTD.'s 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of RICHARDSON ELECTRONICS, LTD.'s 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+190 added−193 removedSource: 10-K (2025-08-04) vs 10-K (2024-08-05)

Top changes in RICHARDSON ELECTRONICS, LTD.'s 2025 10-K

190 paragraphs added · 193 removed · 147 edited across 6 sections

Item 1. Business

Business — how the company describes what it does

34 edited+9 added−6 removed19 unchanged
Biggest changeNo one customer accounted for more than 10 percent of the Company’s consolidated net sales for fiscal 2022. See Note 10, Segment and Geographic Information , of the notes to our consolidated financial statements in Part II, Item 8 of this Annual Report on Form 10-K for further information.
Biggest changeSee Note 12, Segment and Geographic Information , of the notes to our consolidated financial statements in Part II, Item 8 of this Annual Report on Form 10-K for further information on our customer concentration. 7 Human Capital Recruitment & Staffing The Company’s key human capital management objectives are to hire, retain and develop the talent for the execution of the Company’s strategy.
Our Annual Report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Securities and Exchange Act of 1934 are accessible through our website, free of charge, as soon as reasonably practicable after these reports are filed electronically with the Securities and Exchange Commission.
Our Annual Report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Securities and Exchange Act of 1934 are accessible through our website, free of charge, as soon as reasonably practicable after these reports are filed electronically with the Securities and Exchange Commission ("SEC").
Failure to comply with these laws and regulations may result in the assessment of administrative, civil and criminal penalties, imposition of remedial or corrective action requirements, and the imposition of injunctions to prohibit certain activities or force future compliance. 4 Certain of the Company’s products are manufactured in China and are imported into the United States.
Failure to comply with these laws and regulations may result in the assessment of administrative, civil and criminal penalties, imposition of remedial or corrective action requirements, and the imposition of injunctions to prohibit certain activities or force future compliance. Certain of the Company’s products are manufactured in China and are imported into the United States.
PMT’s inventory levels reflect our commitment to maintaining an inventory of a broad range of products for customers who are buying products for replacement of components used in critical equipment and designing in new technologies. PMT also sells a number of products representing trailing edge technology.
PMT’s inventory levels reflect our commitment to maintaining an inventory of a broad range of products for customers who are buying products for the replacement of components used in critical equipment and designing in new technologies. PMT also sells a number of products representing trailing edge technology.
Violations of these laws and regulations may result in severe criminal or civil sanctions and penalties. Our operations also are subject to numerous laws and regulations governing health and safety aspects of our operations, or otherwise relating to environmental protection.
Violations of these laws and regulations may result in severe criminal or civil sanctions and penalties. Our operations also are subject to numerous laws and regulations governing the health and safety aspects of our operations, or otherwise relating to environmental protection.
Information relating to our corporate governance, including our Code of Conduct (including any related amendments or waivers) and information concerning our executive officers, directors and Board committees (including committee charters) is also available on our website.
Information relating to our corporate governance, including our Code of Conduct (including any related amendments or waivers) and information concerning our executive officers, directors and committees of the Board (including committee charters) is also available on our website.
Business Segments The Company reports it financial performance on the operating and reportable segments defined as follows: 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.
Business Segments The Company reports its financial performance on the operating and reportable segments defined as follows: 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.
Among others, we are subject to a variety of data protection laws that change frequently and have requirements that vary from jurisdiction to jurisdiction. We are subject to significant compliance obligations under privacy laws such as the General Data Protection Regulation in the European Union and an expanding list of comprehensive state privacy and/or cybersecurity laws in the United States.
We are subject to a variety of data protection laws that change frequently and have requirements that vary from jurisdiction to jurisdiction. Specifically, we are subject to significant compliance obligations under privacy laws such as the General Data Protection Regulation in the European Union and an expanding list of comprehensive state privacy and/or cybersecurity laws in the United States.
Selected financial data attributable to each segment and geographic region for fiscal 2024, fiscal 2023 and fiscal 2022 is set forth in Note 10, Segment and Geographic Information , of the notes to our consolidated financial statements in Part II, Item 8 of this Annual Report on Form 10-K.
Selected financial data attributable to each segment and geographic region for fiscal 2025, fiscal 2024 and fiscal 2023 is set forth in Note 12, Segment and Geographic Information , of the notes to our consolidated financial statements in Part II, Item 8 of this Annual Report on Form 10-K.
Our importation of products into the United States from China is subject to tariffs instituted and imposed from time to time by The Office of the United States Trade Representative. Management works with suppliers and customers in an effort to mitigate the impact of such tariffs on customer markets.
Our importation of products into the United States from China is subject to tariffs instituted and imposed from time to time by The Office of the United States Trade Representative. Management works with suppliers and customers to mitigate the impact of such tariffs on customer markets.
The foregoing information regarding our website is provided for convenience and the content of our website is not deemed to be incorporated by reference in this report filed with the Securities and Exchange Commission.
The foregoing information regarding our website is provided for convenience and the content of our website is not deemed to be incorporated by reference in this report filed with the SEC.
Expenditures relating to such regulations are made in the ordinary course of our business and do not represent material expenditures and we further do not currently expect that compliance with such laws will require us to make material additional expenditures, however, there is no assurance that existing or future laws and regulations applicable to our operations, products, and services will not have a material adverse effect on our business.
Though we do not currently expect that compliance with such laws and regulations will require us to make material additional expenditures in the future, there is no assurance that existing or future laws and regulations applicable to our operations, products, and services will not have a material adverse effect on our business.
ITEM 1. B usiness General Richardson Electronics, Ltd. (the "Company," "we," "our") is a leading global manufacturer of engineered solutions, power grid and microwave tubes and related consumables; power conversion and RF and microwave components; high-value replacement parts, tubes and service training for diagnostic imaging equipment; and customized display solutions.
ITEM 1. B usiness General 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.
We are also subject to various domestic and international export, trade and anti-corruption laws, such as the Arms Export Control Act, the International Traffic in Arms Regulations (“ITAR”), the Export Administration Regulations (“EAR”), anti-money laundering laws and regulations and the trade and trade sanctions laws and regulations administered by the Office of the United States Trade Representative and the United States Department of the Treasury’s Office of Foreign Assets Control.
Our efforts to comply with privacy and data security laws and regulations complicate our operations and add to our costs. 4 We are also subject to various domestic and international export, trade and anti-corruption laws, such as the Arms Export Control Act, the International Traffic in Arms Regulations (“ITAR”), the Export Administration Regulations (“EAR”), anti-money laundering laws and regulations and the trade and trade sanctions laws and regulations administered by the Office of the United States Trade Representative and the United States Department of the Treasury’s Office of Foreign Assets Control.
Our fiscal year 2024 began on May 28, 2023 and ended on June 1, 2024, our fiscal year 2023 began on May 29, 2022 and ended on May 27, 2023 and our fiscal year 2022 began on May 30, 2021 and ended on May 28, 2022.
Our fiscal year 2025 began on June 2, 2024 and ended on May 31, 2025, our fiscal year 2024 began on May 28, 2023 and ended on June 1, 2024 and our fiscal year 2023 began on May 29, 2022 and ended on May 27, 2023.
Failure to comply with these laws and regulations subjects us to potential regulatory enforcement activity, fines, private litigation including class actions, reputational impacts, and other costs. Our efforts to comply with privacy and data security laws and regulations complicate our operations and add to our costs.
Failure to comply with these laws and regulations subjects us to potential regulatory enforcement activity, fines, private litigation including class actions, reputational impacts, and other costs.
We continue to pursue new international sales to further expand our geographic reach. Major Customers No one customer accounted for more than 10 percent of the Company’s consolidated net sales for fiscal 2024. Sales to one customer in our PMT segment totaled $31.2 million, which accounted for 12 percent of the Company’s consolidated net sales in fiscal 2023.
Major Customers No single customer accounted for more than 10 percent of the Company’s consolidated net sales for fiscal 2025 and fiscal 2024. Sales to one customer in our PMT segment totaled $31.2 million, which accounted for 12 percent of the Company’s consolidated net sales in fiscal 2023.
While the market for these trailing edge technology products is declining, PMT is increasing its market share. PMT often buys products it knows it can sell ahead of any supplier price increases and extended lead times. As manufacturers for these products exit the business, PMT has the option to purchase a substantial portion of their remaining inventory.
While the market for these trailing edge technology products is declining, PMT is increasing its market share. PMT often buys products it knows it can sell ahead of any supplier price increases and extended lead times.
These laws and regulations, which differ among jurisdictions, include, among others, those related to financial and other disclosures, accounting standards, privacy and data protection, cybersecurity, intellectual property, corporate governance, tax, trade, antitrust, employment, import/export, anti-corruption, and environmental regulatory compliance.
These laws and regulations, which differ among jurisdictions, include, among others, those related to financial and other disclosures, accounting standards, privacy and data protection, cybersecurity, intellectual property, corporate governance, tax, trade, antitrust, employment, import/export, anti-corruption, and environmental regulatory compliance. Expenditures relating to such regulations are made in the ordinary course of our business and do not ordinarily represent material expenditures.
The Company offers employees a competitive compensation program, designed to recognize and reward both individual and company performance through base pay, variable compensation programs, and health, well-being and retirement programs to meet the needs of our employees. 7 Diversity, Equity, Inclusion & Belonging ("DEI&B") We are an international company with offices and personnel located around the world.
The Company offers employees a competitive compensation program, designed to recognize and reward both individual and company performance through base pay, variable compensation programs, and health, well-being and retirement programs to meet the needs of our employees.
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.
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.
Our proprietary products include thyratrons and rectifiers, power tubes, ignitrons, magnetrons, phototubes, microwave generators, Ultracapacitor modules and liquid crystal display monitors. The materials used in the manufacturing process consist of glass bulbs and tubing, nickel, stainless steel and other metals, plastic and metal bases, ceramics and a wide variety of fabricated metal components.
The materials used in the manufacturing process consist of glass bulbs and tubing, nickel, stainless steel and other metals, plastic and metal bases, ceramics and a wide variety of fabricated metal components.
We establish credit limits for each customer and routinely review delinquent and aging accounts. 6 Distribution We maintain over 100,000 part numbers in our product inventory database and we estimate that more than 90% of orders received by 6:00 p.m. local time are shipped complete the same day for in-stock product.
Distribution We maintain over 100,000 part numbers in our product inventory database and we estimate that more than 90% of orders received by 6:00 p.m. local time are shipped complete the same day for in-stock product. Customers can access our products on our websites, www.rell.com, www.canvys.com, www.rellpower.com, www.relltubes.com and www.rellaser.com, through electronic data interchange, or by telephone.
We understand, respect, and value the similarities as well as the differences of our employees. Our human capital is a critical asset that enables us to serve and support our global customer base. Our effectiveness in maximizing the talents of people of different backgrounds, experiences, and perspectives is key to our continued global success.
Culture We are an international company with offices and personnel located around the world. We understand, respect, and value the similarities as well as the differences of our employees. Our human capital is a critical asset that enables us to serve and support our global customer base.
Information on stock availability, pricing in local currency, cross-reference information, customers and market analyses are obtainable throughout the entire distribution network. The content of our websites is not deemed to be incorporated by reference in this report filed with the Securities and Exchange Commission. International Sales During fiscal 2024, we made approximately 60% of our sales outside the United States.
The content of our websites is not deemed to be incorporated by reference in this report filed with the Securities and Exchange Commission. International Sales During fiscal 2025, we made approximately 56% of our sales outside the United States. We continue to pursue new international sales to further expand our geographic reach.
For information regarding the warranty reserves, see Note 3, Significant Accounting Policies and Disclosures , of the notes to our consolidated financial statements in Part II, Item 8 of this Annual Report on Form 10-K. 5 In addition to third party products, we sell proprietary products principally under certain trade names we own including Amperex ®, Cetron ® and National® .
PMT’s suppliers provide warranty coverage for the products and allow the return of defective products, including those returned to PMT by its customers. For information regarding the warranty reserves, see Note 4, Significant Accounting Policies and Disclosures , of the notes to our consolidated financial statements in Part II, Item 8 of this Annual Report on Form 10-K.
Competition for such personnel is intense and the salary, benefits and other costs to employ the right personnel may impact our results and performance. As of June 1, 2024, we employed 442 individuals, 407 of whom were employed on a full-time basis and 35 of whom were employed on a part-time basis.
Competition for such personnel is intense and the salary, benefits and other costs to employ the right personnel may impact our results and performance.
PMT has distribution agreements with many of its suppliers; most of these agreements provide exclusive distribution rights that often include global coverage. The agreements are typically long term, and usually contain provisions permitting termination by either party if there are significant breaches that are not cured within a reasonable period.
The agreements are typically long term, and usually contain provisions permitting termination by either party if there are significant breaches that are not cured within a reasonable period. Although some of these agreements allow PMT to return inventory periodically, others do not, in which case PMT may have obsolete inventory that they cannot return to the supplier.
Sales and Product Management We have employees, as well as authorized representatives who are not our employees, selling our products primarily in regions where we do not have a direct sales presence. We offer various credit terms to qualifying customers as well as cash in advance and credit card terms.
After the January 2025 sale of certain assets to DirectMed, the Company manufactures and repairs CT tubes and sells them exclusively to DirectMed under a supply agreement. 6 Sales and Product Management We have employees, as well as authorized representatives who are not our employees, selling our products primarily in regions where we do not have a direct sales presence.
Of these, 284 full-time and 15 part-time employees were located in the United States and 123 full-time and 20 part-time employees were located internationally. All our employees are non-union.
Employees As of May 31, 2025, we employed 431 individuals, 396 of whom were employed on a full-time basis and 35 of whom were employed on a part-time basis. Of these, 272 full-time and 16 part-time employees were in the United States and 124 full-time and 19 part-time employees were located internationally. All our employees are non-union.
We also have satellite warehouses in Sao Paulo, Brazil; Shanghai, China; Bangkok, Thailand; and Hook, United Kingdom. Our data processing network provides on-line, real-time interconnection of all sales offices and central distribution operations, 24 hours per day, seven days per week.
Our data processing network provides on-line, real-time interconnection of all sales offices and central distribution operations, 24 hours per day, seven days per week. Information on stock availability, pricing in local currency, cross-reference information, customers and market analyses are obtainable throughout the entire distribution network.
Customers can access our products on our websites, www.rell.com, www.rellhealthcare.com, www.canvys.com, www.rellpower.com, www.relltubes.com and www.rellaser.com, through electronic data interchange, or by telephone. Customer orders are processed by our regional sales offices and supported primarily by one of our distribution facilities in LaFox, Illinois; Fort Mill, South Carolina; Amsterdam, Netherlands; Marlborough, Massachusetts; Donaueschingen, Germany; or Singapore, Singapore.
Customer orders are processed by our regional sales offices and supported primarily by one of our distribution facilities in LaFox, Illinois; Amsterdam, Netherlands; Marlborough, Massachusetts; Donaueschingen, Germany; or Singapore, Singapore. We also have satellite warehouses in Sao Paulo, Brazil; Shanghai, China; Bangkok, Thailand; and Hook, United Kingdom.
Nearly 55% of our products are manufactured at our facilities located in LaFox, Illinois, Marlborough, Massachusetts and Donaueschingen, Germany, or by one of our manufacturing partners throughout the world. We serve customers in the alternative energy, healthcare, aviation, broadcast, communications, industrial, marine, medical, military, scientific and semiconductor markets.
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 of our partners manufacture to our strict specifications and per our supplier code of conduct.
Human Capital Resources Recruitment & Staffing The future success of our Company depends on our ability to attract, hire, motivate, retain and further develop top talent, including highly skilled technical, management and sales personnel. The skills, experience and industry knowledge of our employees significantly benefit our operations and performance.
Our talent needs include highly skilled technical, management and sales personnel. Key attributes of our personnel include: customer focus, integrity, continuous improvement and a results-driven mindset. The skills, experience and industry knowledge of our employees significantly benefit our operations and performance.
Removed
Although some of these agreements allow PMT to return inventory periodically, others do not, in which case PMT may have obsolete inventory that they cannot return to the supplier. PMT’s suppliers provide warranty coverage for the products and allow the return of defective products, including those returned to PMT by its customers.
Added
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.
Removed
Fostering, cultivating, and preserving a culture of diversity, equity, inclusion, and belonging is a key priority for the Company.
Added
On January 24, 2025, the Company sold a substantial portion of the assets of its Healthcare business to DirectMed Imaging, LLC (“DirectMed”), a Delaware limited liability company, and entered into an exclusive 10-year global supply agreement in which Richardson will supply DirectMed with repaired Siemens CT X-ray tubes.
Removed
We seek to embrace and encourage our employees’ differences in age, disability, ethnicity, family or marital status, gender identity or expression, language, national origin, physical and mental ability, political affiliation, race, religion, sexual orientation, socio-economic status, veteran status, and other characteristics that make our employees unique. Management has identified DEI&B as a priority for our Company.
Added
Additionally, the Company will continue manufacturing a limited quantity of ALTA CT X-ray tubes exclusively for DirectMed under a supply agreement.
Removed
Significant positive change requires careful planning, leadership, resources, and coordination. The Company established a DEI&B committee to plan and implement changes to achieve our goal of being a more diverse and inclusive organization. The DEI&B committee has been charged with making recommendations about how we, as a company, can promote and act upon the Company’s initiatives in this area.
Added
A description of this transaction, which resulted in a total loss of $5.1 million being recorded for the fiscal year ended May 31, 2025 is provided in Note 11 , Disposal of Healthcare Assets and Other Charges, of the notes to our consolidated financial statements in Part II, Item 8 of this Annual Report on Form 10-K.
Removed
The committee will identify priorities based on employee input and incorporate these into the Company’s strategic plans, work to establish accountability and methods of measuring our progress and provide appropriate communications about our plans and achievements to our stakeholders.
Added
As manufacturers for these products exit the business, PMT has the option to purchase a substantial portion of their remaining inventory. 5 PMT has distribution agreements with many of its suppliers; most of these agreements provide exclusive distribution rights that often include global coverage.
Removed
To date, DEI&B initiatives have focused on the following: • The election of a female to serve on the Board of Directors • Increasing DEI&B awareness on a Company-wide basis through education and involvement • Inclusion of socially responsible funds in our 401K Plan • Providing regular training, communication, activities, and surveys regarding DEI&B matters to our employees Website Access to SEC Reports We maintain an Internet website at www.rell.com .
Added
In addition to third party products, we sell proprietary products principally under certain trade names we own including Amperex ®, Cetron ® and National® . Our proprietary products include thyratrons and rectifiers, power tubes, ignitrons, magnetrons, phototubes, microwave generators, Ultracapacitor modules and liquid crystal display monitors.
Added
We offer various credit terms to qualifying customers as well as cash in advance and credit card terms. We establish credit limits for each customer and routinely review delinquent and aging accounts.
Added
Our effectiveness in maximizing the talents of people of different backgrounds, experiences, and perspectives is key to our continued global success. Fostering, cultivating, and preserving a positive work culture is a key priority for the Company. We seek to embrace and encourage the individual characteristics that make our employees unique.
Added
Website Access to SEC Reports We maintain an Internet website at www.rell.com .

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

36 edited+11 added−11 removed74 unchanged
Biggest changeAlso, royalty or license arrangements may not be available at all. We may have to stop selling certain products or certain technologies, which could affect our ability to compete effectively. Potential lawsuits, with or without merit, may divert management’s attention, and we may incur significant expenses in our defense.
Biggest changeThe payment of any such damages or royalties may significantly increase our operating expenses and harm our operating results and financial condition. Also, royalty or license arrangements may not be available at all. We may have to stop selling certain products or certain technologies, which could affect our ability to compete effectively.
A major interruption or disruption in service at any of our distribution centers, or a disruption at the operations of any of our significant vendors or customers, for any reason, including reasons beyond our control (such as natural disasters, pandemics or other health crises, work stoppages, power loss, cyber attacks, incidents of terrorism or other significant disruptions of services from our third party providers) could cause cancellations or delays in a significant number of shipments to customers and, as a result, could have a severe impact on our business, operations and financial performance.
A major interruption or disruption in service at any of our distribution centers, or a disruption at the operations of any of our significant vendors or customers or transportation service providers, for any reason, including reasons beyond our control (such as natural disasters, pandemics or other health crises, work stoppages, power loss, cyber attacks, incidents of terrorism or other significant disruptions of services from our third party providers) could cause cancellations or delays in a significant number of shipments to customers and, as a result, could have a severe impact on our business, operations and financial performance.
If any of these risks materialize, they may result in disruptions to our business and the diversion of management time and attention, which could increase the costs of operating our existing or acquired businesses or negate the expected benefits of the acquisitions. 11 Economic weakness and uncertainty and other challenges could adversely affect our revenues and gross margins.
If any of these risks materialize, they may result in disruptions to our business and the diversion of management time and attention, which could increase the costs of operating our existing or acquired businesses or negate the expected benefits of the acquisitions. Economic weakness and uncertainty and other challenges could adversely affect our revenues and gross margins.
Legal and Regulatory Risks We may be subject to intellectual property rights claims, which are costly to defend, could require payment of damages or licensing fees, and/or could limit our ability to use certain technologies in the future. Substantial litigation and threats of litigation regarding intellectual property rights exist in the display systems and electronics industries.
Legal and Regulatory Risks We may be subject to claims relating to intellectual property rights which are costly to defend, could require payment of damages or licensing fees, and/or could limit our ability to use certain technologies in the future. Substantial litigation and threats of litigation regarding intellectual property rights exist in the display systems and electronics industries.
Richardson. While we have employment contracts in place with several of our executive officers, we nevertheless cannot be assured that we will retain our key employees and the loss of service of any of these officers or key management personnel could have a material adverse effect on our business growth and operating results.
While we have employment contracts in place with several of our executive officers, we nevertheless cannot be assured that we will retain our key employees and the loss of service of any of these officers or key management personnel could have a material adverse effect on our business growth and operating results.
Failure to successfully implement our growth initiatives, or failure to realize the benefits expected from these initiatives if implemented, may create ongoing operating losses or otherwise adversely affect our business, operating results and financial condition. Our growth strategy focuses on expanding our Green Energy Solutions, our healthcare and our power conversion businesses.
Failure to successfully implement our growth initiatives, or failure to realize the benefits expected from these initiatives if implemented, may create ongoing operating losses or otherwise adversely affect our business, operating results and financial condition. Our growth strategy focuses on expanding our Green Energy Solutions and our power conversion businesses.
We may be unable to implement our growth initiatives or strategic priorities or reach profitability in the near future or at all, due to many factors, including factors outside of our control. We also cannot be certain that executing on our strategy will generate the benefits we expect.
We may be unable to implement our growth initiatives or strategic priorities or reach profitability in the near future or at all, due to many factors, including factors outside of our control. We also cannot be certain that executing our strategy will generate the benefits we expect.
There are also a limited number of Chinese manufacturers whose ability to produce vacuum tubes has progressed over the past several years. The most significant competitive risk comes from technical obsolescence. Canvys faces many competitors in the markets we serve.
There are also a limited number of Chinese manufacturers whose ability to produce vacuum tubes has progressed over the past several years. The most significant competitive risk comes from technical obsolescence. Our Canvys business faces many competitors in the markets we serve.
Our future success will require an ability to attract and retain qualified employees. Competition for such key personnel is intense and we cannot be assured that we will be successful in attracting and retaining such personnel. We cannot make assurances that key personnel will not depart in the future.
Our future success will require an ability to hire and retain qualified employees. Competition for such key personnel is intense and we cannot be assured that we will be successful in attracting and retaining such personnel. We cannot make assurances that key personnel will not depart in the future.
See We are dependent on a limited number of vendors to supply us with essential products, Disruptions to the supply chain could adversely impact our business and Major disruptions to our logistics capability or to the operations of our key vendors or customers could have a material adverse impact on our operations.
See the business and operational risk factors: We are dependent on a limited number of vendors to supply us with essential products, Disruptions to the supply chain could adversely impact our business and Major disruptions to our logistics capability or to the operations of our key vendors or customers could have a material adverse impact on our operations.
To the extent that our supply chain, costs, sales or profitability are negatively affected by the tariffs or other trade actions, our business, financial condition and results of operations may be materially adversely affected. Ownership Risks A single stockholder controls a majority of the Company's voting stock. As of July 26, 2024, Edward J.
To the extent that our supply chain, costs, sales or profitability are negatively affected by the tariffs or other trade actions, our business, financial condition and results of operations may be materially adversely affected. Ownership Risks A single stockholder controls a majority of the Company's voting stock. As of July 28, 2025, Edward J.
Many factors may cause the market price for our common stock to change, including: (i) our operating results as compared to investors’ expectations in any period, (ii) market perceptions concerning our future earnings prospects, (iii) adverse changes in general market conditions or economic trends and (iv) changes or events in our industry or the world, such as market reactions to public health issues, natural disasters, changes in global, national, or regional economies, inflation, governmental policies, political unrest, military action and armed conflicts (such as the Russia-Ukraine and Israel-Hamas wars), terrorist activities, political and social turmoil, civil unrest and other crises.
Many factors may cause the market price for our common stock to change, including: (i) our operating results as compared to investors’ expectations in any period, (ii) market perceptions concerning our future earnings prospects, (iii) adverse changes in general market conditions or economic trends and (iv) changes or events in our industry or the world, such as market reactions to public health issues, natural disasters, changes in global, national, or regional economies, inflation, governmental policies, political unrest, military action and armed conflicts (in Europe and the Middle East), terrorist activities, political and social turmoil, civil unrest and other crises.
Supply chain disruptions may be exacerbated by other events and conditions, including the Russia-Ukraine and Israel-Hamas wars, which could continue to adversely affect our ability to receive goods on a timely basis and increase our material costs. Short-term or sustained increases in market demand may exceed our suppliers’ production capacity or otherwise strain our supply chain.
Supply chain disruptions may be exacerbated by other events and conditions, including conflicts in Europe and the Middle East, which could continue to adversely affect our ability to receive goods on a timely basis and increase our material costs. Short-term or sustained increases in market demand may exceed our suppliers’ production capacity or otherwise strain our supply chain.
In addition, customer difficulties in the future could result from economic uncertainty or the deterioration of conditions in markets in which we operate, the cyclical nature of their respective businesses, such as in the oil and gas industry, or otherwise and, in turn, result in decreases in product demand, increases in bad debt write-offs, decreases in timely collection of accounts receivable and adjustments to our allowance for credit losses, resulting in material reductions to our revenues and net earnings. 12 Major disruptions to our logistics capability or to the operations of our key vendors or customers could have a material adverse impact on our operations.
In addition, customer difficulties in the future could result from economic uncertainty or the deterioration of conditions in markets in which we operate, the cyclical nature of their respective businesses, such as in the oil and gas industry, or otherwise and, in turn, result in decreases in product demand, increases in bad debt write-offs, decreases in timely collection of accounts receivable and adjustments to our allowance for credit losses, resulting in material reductions to our revenues and net earnings.
During fiscal 2024 two of our suppliers each represented 11% of our total cost of sales. Our success depends, in large part, on maintaining current vendor relationships and developing new relationships.
During fiscal 2025, two of our suppliers each represented more than 10% of our total cost of sales. Our success depends, in large part, on maintaining current vendor relationships and developing new relationships.
Richardson to exert control over the outcome of stockholder votes, including votes concerning the election of directors, by-law amendments, possible mergers, corporate control contests and other significant corporate transactions. General Risk Factors Failure to attract and retain key skilled personnel could hurt operations. Our success depends to a large extent upon the continued services of key management personnel, particularly Mr.
Richardson to exert control over the outcome of stockholder votes, including votes concerning the election of directors, by-law amendments, possible mergers, corporate control contests and other significant corporate transactions. General Risk Factors Failure to attract and retain key skilled personnel could hurt our operations.
Our ability to make interest and scheduled principal payments on any such indebtedness and operate within restrictive covenants could be adversely impacted by changes in the availability, terms and cost of capital, changes in interest rates or changes in our credit ratings or our outlook.
We may incur indebtedness in the future under our credit facility with PNC Bank N.A. Our ability to make interest and scheduled principal payments on any such indebtedness and operate within restrictive covenants could be adversely impacted by changes in the availability, terms and cost of capital, changes in interest rates or changes in our credit ratings or our outlook.
Our international revenues and expenses generally are derived from sales and operations in currencies other than the U.S. dollar. Accordingly, when the U.S. dollar strengthens in relation to the base currencies of the countries in which we sell our products, our U.S. dollar reported net revenue and income would decrease. We currently do not engage in any currency hedging transactions.
Accordingly, when the U.S. dollar strengthens in relation to the base currencies of the countries in which we sell our products, our U.S. dollar reported net revenue and income would decrease. We currently do not engage in any currency hedging transactions.
These risks include the costs and difficulties of managing foreign entities, limitations on the repatriation and investment of funds, cultural differences that affect customer preferences and business practices, unstable political or economic conditions, geopolitical risks and demand or supply reactions from events that could include political crises and conflict (such as Russia-Ukraine and Israel-Hamas wars), war, a major terrorist attack, natural disasters, actual or threatened public health emergencies, trade protection measures and import or export licensing requirements, monetary policy, inflation, economic growth, recession, commodity prices, currency volatility, currency controls, and changes in tax laws.
These risks include the costs and difficulties of managing foreign entities, limitations on the repatriation and investment of funds, cultural differences that affect customer preferences and business practices, unstable political or economic conditions, geopolitical risks and demand or supply reactions from events that could include political crises and conflict (including in Europe and the Middle East), war, a major terrorist attack, natural disasters, actual or threatened public health emergencies, trade protection measures and import or export licensing requirements, monetary policy, inflation, economic growth, recession, commodity prices, currency volatility, currency controls, and changes in tax laws. 13 We also face exposure to fluctuations in foreign currency exchange rates because we conduct business outside of the United States.
Our operations could be adversely affected by uncertain conditions in global or regional economies, including conflict (such as Russia-Ukraine and Israel-Hamas wars), higher inflation or interest rates, recession, natural disasters, impacts of and issues related to climate change, business disruptions, our ability to adequately staff operations or otherwise and may in the future result in the decline of conditions in markets in which we operate.
Our operations could be adversely affected by uncertain conditions in global or regional economies, including conflict (such as ongoing conflict in Europe and the Middle East), higher inflation or interest rates, recession, natural disasters, impacts of and issues related to climate change, business disruptions, and our ability to adequately staff operations.
These tariff modifications are not expected to materially impact our Company. 15 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.
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.
We operate our global logistics services through specialized and centralized distribution centers. We depend on third party transportation service providers for the delivery of products to our customers.
Major disruptions to our logistics capability or to the operations of our key vendors or customers could have a material adverse impact on our operations. We operate our global logistics services through specialized and centralized distribution centers. We depend on third party transportation service providers for the delivery of products to our customers.
In addition, we may be required to pay damage awards or settlements, become subject to injunctions or other equitable remedies, or determine to abandon certain lines of business, that may cause a material adverse effect on our results of operations, financial position and cash flows. 14 We may incur substantial operational costs or be required to change our business practices to comply with data privacy and data protection laws and regulations around the world.
In addition, we may be required to pay damages or settlements, become subject to injunctions or other equitable remedies, or determine to abandon certain lines of business, that may cause a material adverse effect on our results of operations, financial position and cash flows.
Inflation and government efforts to combat inflation, such as raising the benchmark interest rate, could increase market volatility and have an adverse effect on the financial market and general economic conditions. Such adverse conditions could negatively impact demand for our products, which could adversely affect our profitability, results of operations and cash flow.
Inflation and government efforts to combat inflation, such as raising the benchmark interest rate, could increase market volatility and have an adverse effect on the financial market and general economic conditions.
We are subject to many privacy and data protection laws and regulations in various jurisdictions, which continue to evolve rapidly. The EU’s General Data Protection Regulation (“GDPR”) includes operational requirements for companies that receive or process personal data of residents of the European Union, including more robust documentation requirements for data protection compliance programs.
The EU’s General Data Protection Regulation (“GDPR”) includes operational requirements for companies that receive or process personal data of residents of the European Union, including more robust documentation requirements for data protection compliance programs.
Acquisitions are subject to risks associated with financing the acquisition, and integrating the operations, personnel and systems of the acquired businesses.
In addition, we may not obtain the expected benefits or cost savings from acquisitions. Acquisitions are subject to risks associated with financing the acquisition, and integrating the operations, personnel and systems of the acquired businesses.
If we fail to maintain an effective system of internal controls or discover material weaknesses in our internal controls over financial reporting, we may not be able to detect fraud or report our financial results accurately or timely.
Changes in the cost of providing employee benefits in order to attract and retain personnel, including changes in health care costs, could lead to increased costs in any of our operations. 16 If we fail to maintain an effective system of internal controls or discover material weaknesses in our internal controls over financial reporting, we may not be able to detect fraud or report our financial results accurately or timely.
A violation of the laws or the regulations enumerated above could materially adversely affect our business, reputation, financial condition and results of operations. Ongoing changes to tariffs and trade relations may adversely affect our business. Our international operations are subject to changing tariffs and developments in trade relations.
A violation of the laws or the regulations enumerated above could materially adversely affect our business, reputation, financial condition and results of operations. 15 Significant Tariffs and Other Trade Measures Could Adversely Affect Our Business, Results of Operations, Financial Position and Cash Flows. The Company’s operations subject it to tariffs and other trade protection measures.
Any such actions could result in an adverse reaction in the financial markets due to a loss of confidence in the reliability of our financial statements. 16 If we are deemed to be an investment company, we will be required to meet burdensome compliance requirements and restrictions on our activities. We have had significant cash and investments.
If we are deemed to be an investment company, we will be required to meet burdensome compliance requirements and restrictions on our activities. We have had significant cash and investments.
See Note 11, Risks and Uncertainties , of the notes to our consolidated financial statements in Part II, Item 8 of this Annual Report on Form 10-K for further information regarding specific legal matters related to our patents.
See Note 13, Risks and Uncertainties , of the notes to our consolidated financial statements in Part II, Item 8 of this Annual Report on Form 10-K for further information regarding specific legal matters related to our patents. 14 Additionally, if an infringement claim is successful, we may be required to pay damages or seek royalty or license arrangements which may not be available on commercially reasonable terms.
In addition, we may be subject to sanctions or investigation by regulatory authorities, such as the Securities and Exchange Commission or NASDAQ.
In addition, we may be subject to sanctions or investigation by regulatory authorities, such as the Securities and Exchange Commission or NASDAQ. Any such actions could result in an adverse reaction in the financial markets due to a loss of confidence in the reliability of our financial statements.
Also, acquisitions are accompanied by risks, such as potential exposure to unknown liabilities and the possible loss of key employees and customers of the acquired business. In addition, we may not obtain the expected benefits or cost savings from acquisitions.
We may not be able to identify attractive acquisition candidates or complete the acquisition of identified candidates at favorable prices and upon advantageous terms. Also, acquisitions are accompanied by risks, such as potential exposure to unknown liabilities and the possible loss of key employees and customers of the acquired business.
Our sales and gross margins on certain products could be negatively impacted if we are unable to successfully pass through the additional cost of applicable tariffs, or if higher prices reduce demand for the Company's products. 13 Financial Risks There is a possible risk of identifiable intangible asset impairment, which could reduce the value of our assets and reduce our net income in the year in which the write-off occurs.
Our sales and gross margins on certain products could be negatively impacted if we are unable to successfully pass through the additional cost of applicable tariffs, or if higher prices reduce demand for the Company's products. Financial Risks Incurring indebtedness and restrictive covenants under our credit facility could limit our operational and financial flexibility.
Our business and results of operations are subject to a broad range of uncertainties arising out of world and domestic events.
Such adverse conditions could negatively impact demand for our products, which could adversely affect our profitability, results of operations and cash flow. 12 Our business and results of operations are subject to a broad range of uncertainties arising out of world and domestic events.
If we are deemed to be subject to the Investment Company Act, compliance with required additional regulatory burdens would increase our operating expenses. Evolving expectations around corporate responsibility practices, specifically related to environmental, social and governance (“ESG”) matters, may expose us to reputational and other risks.
If we are deemed to be subject to the Investment Company Act, compliance with required additional regulatory burdens would increase our operating expenses. Our stock price may be volatile.
We also face exposure to fluctuations in foreign currency exchange rates because we conduct business outside of the United States. Price increases caused by currency exchange rate fluctuations may make our products less competitive or may have an adverse effect on our margins.
Price increases caused by currency exchange rate fluctuations may make our products less competitive or may have an adverse effect on our margins. Our international revenues and expenses generally are derived from sales and operations in currencies other than the U.S. dollar.
Removed
We may not be successful in identifying, consummating and integrating future acquisitions, if any. We may not be able to identify attractive acquisition candidates or complete the acquisition of identified candidates at favorable prices and upon advantageous terms.
Added
There are various risks that may prevent the Company from realizing the anticipated benefits of the IMES Sale. In January 2025, we entered into an Asset Purchase Agreement with DirectMed.
Removed
Our intangible assets could become impaired, which could reduce the value of our assets and reduce our net income in the year in which the write-off occurs. We ascribe value to certain intangible assets which consist of customer lists and trade names resulting from acquisitions.
Added
Pursuant to the terms and subject to the conditions of the Purchase Agreement, Buyer purchased assets of the Company used in the operation of its International Medical Equipment and Service (IMES) business as well as ALTA tube and related inventory (the “IMES Sale”).
Removed
An impairment charge on intangible assets would be incurred in the event that the fair value of the intangible assets is less than their current carrying values. We evaluate whether events have occurred that indicate all, or a portion, of the carrying amount of intangible assets may no longer be recoverable.
Added
There are various risks that may prevent the Company from realizing the anticipated benefits of the IMES Sale: the expected cost savings or operational efficiencies from the IMES Sale may not be fully realized, which may affect our financial performance; the continued integration of our operations after the IMES Sale may be more complex than initially anticipated, which may affect our business operations and reduce synergies across our business units; the value of our remaining assets or our ability to deploy proceeds from the IMES Sale could be negatively impacted by adverse economic conditions or market volatility or uncertainty following the transaction. 11 We may not be successful in identifying, consummating and integrating future acquisitions, if any.
Removed
If this is the case, an impairment charge to earnings would be necessary. Our indebtedness and restrictive covenants under our credit facility could limit our operational and financial flexibility. We may incur indebtedness in the future under our credit facility with PNC Bank NA.
Added
These potential lawsuits, with or without merit, may divert management’s attention, and we may incur significant expenses in our defense.
Removed
Additionally, if an infringement claim is successful, we may be required to pay damages or seek royalty or license arrangements which may not be available on commercially reasonable terms. The payment of any such damages or royalties may significantly increase our operating expenses and harm our operating results and financial condition.
Added
We may incur substantial operational costs or be required to change our business practices to comply with data privacy and data protection laws and regulations around the world. We are subject to many privacy and data protection laws and regulations in various jurisdictions, which continue to evolve rapidly.
Removed
The U.S. government has made statements and taken certain actions that have led to, and may in the future lead to, further changes to U.S. and international trade policies, including recently imposed tariffs affecting certain products exported by a number of U.S. trading partners, including China. There were no changes or additional tariffs that affected our fiscal 2024 operations.
Added
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.
Removed
In May 2024, the U.S. government announced proposed tariff modifications for certain products from China. Proposed tariffs of 25%, 50% and 100% on certain products from China are expected to become effective on August 1, 2024, January 1, 2025, and January 1, 2026.
Added
Due in part to these measures, some countries are changing their trade policies relating to goods imported from the U.S.
Removed
Changes in the cost of providing employee benefits in order to attract and retain personnel, including changes in health care costs, could lead to increased costs in any of our operations.
Added
These global trade disruptions and geopolitical tensions, together with any related downturns in the global economy, could damp e n customer demand, i ncrease market volatility, and impact currency exchange rates, all of which could materially and adversely affect the Company’s financial performance.
Removed
Investors, stockholders, customers, suppliers and other third parties are increasingly focusing on ESG and corporate social responsibility endeavors and reporting. Certain institutional investors, investment funds, other influential investors, customers, suppliers and other third parties are also increasingly focused on ESG practices.
Added
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.
Removed
Companies that do not adapt to or comply with the evolving investor or stakeholder expectations and standards, or which are perceived to have not responded appropriately, may suffer from reputational damage and result in the business, financial condition and/or stock price of a company being materially and adversely affected.
Added
In addition, the impact of trade disruptions on general economic conditions and demand for electronic components is difficult to predict. The recent tariff modifications did not materially impact our fiscal 2025 results.
Removed
Further, this increased focus on ESG issues may result in new regulations and/or third-party requirements that could adversely impact our business, or certain shareholders reducing or eliminating their holdings of our stock. Additionally, an allegation or perception that the Company has not taken sufficient action in these areas could negatively harm our reputation. Our stock price may be volatile.
Added
Our success depends to a large extent upon the continued services of key management personnel, particularly Mr. Richardson.

Item 2. Properties

Properties — owned and leased real estate

2 edited+0 added−0 removed1 unchanged
Biggest changeOur facility locations, their primary use and segments served are as follows: Location Leased/Owned Use Segment LaFox, Illinois * Owned Corporate/Sales/Distribution/Manufacturing PMT/Canvys/Healthcare Woodland Hills, California Leased Sales PMT Marlborough, Massachusetts Leased Sales/Distribution/Manufacturing Canvys Fort Mill, South Carolina Leased Sales/Distribution/Testing/Repair Healthcare Sao Paulo, Brazil Leased Sales/Distribution PMT Beijing, China Leased Sales PMT Nanjing, China Leased Sales PMT Shanghai, China Leased Sales/Distribution PMT Shenzhen, China Leased Sales PMT Brive, France Leased Sales PMT Paris, France Leased Sales PMT Donaueschingen, Germany Leased Sales/Distribution/Manufacturing Canvys Puchheim, Germany Leased Sales PMT Mumbai, India Leased Sales PMT Florence, Italy Leased Sales PMT Milan, Italy Leased Sales PMT Tokyo, Japan Leased Sales PMT Mexico City, Mexico Leased Sales PMT Amsterdam, Netherlands Leased Sales/Distribution/Manufacturing PMT/Healthcare Singapore, Singapore Leased Sales/Distribution PMT Seoul, South Korea Leased Sales PMT Taipei, Taiwan Leased Sales PMT/Canvys Bangkok, Thailand Leased Sales/Distribution PMT Dubai, United Arab Emirates Leased Sales/Testing PMT Hook, United Kingdom Leased Sales/Distribution/Testing/Repair PMT Lincoln, United Kingdom Leased Sales PMT/Canvys * LaFox, Illinois is also the location of our corporate headquarters.
Biggest changeOur facility locations, their primary use and segments served are as follows: Location Leased/ Owned Use Segment LaFox, IL* Owned Corporate/Sales/Distribution/ Manufacturing PMT/Canvys/ GES/Healthcare Woodland Hills, CA Leased Sales PMT Marlborough, MA Leased Sales/Distribution Canvys Sao Paulo, Brazil Leased Sales/Distribution PMT Beijing, China Leased Sales PMT Nanjing, China Leased Sales PMT Shanghai, China Leased Sales/Distribution PMT Shenzhen, China Leased Sales PMT Brive, France Leased Sales PMT Paris, France Leased Sales PMT Donaueschingen, Germany Leased Sales/Distribution/Manufacturing Canvys Puchheim, Germany Leased Sales PMT Mumbai, India Leased Sales PMT Florence, Italy Leased Sales PMT Milan, Italy Leased Sales PMT Tokyo, Japan Leased Sales PMT Mexico City, Mexico Leased Sales PMT Amsterdam, Netherlands Leased Sales/Distribution/Manufacturing PMT Singapore, Singapore Leased Sales/Distribution PMT Seoul, South Korea Leased Sales PMT Taipei, Taiwan Leased Sales PMT/Canvys Bangkok, Thailand Leased Sales/Distribution PMT Dubai, United Arab Emirates Leased Sales/Testing PMT Hook, United Kingdom Leased Sales/Distribution/Testing/Repair PMT Lincoln, United Kingdom Leased Sales PMT/Canvys * LaFox, Illinois is also the location of our corporate headquarters.
ITEM 2. P roperties The Company owns one facility and leases 25 facilities. We own our corporate facility and largest distribution center, which is located on approximately 100 acres in LaFox, Illinois and consists of approximately 224,000 square feet of manufacturing, warehouse and office space.
ITEM 2. P roperties The Company owns one facility and leases 24 facilities. We own our corporate facility and largest distribution center, which is located on approximately 100 acres in LaFox, Illinois and consists of approximately 224,000 square feet of manufacturing, warehouse and office space.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

5 edited+0 added−1 removed2 unchanged
Biggest changeMembership in the U.S. all-cap Russell 3000® Index includes the Company in the large-cap Russell 1000® Index and the small-cap Russell 2000® Index. 20 Performance Graph As discussed in the Form 10-K for fiscal 2023, the NASDAQ Electronic Components Index is not available for fiscal 2024 and has been replaced by the Russell Microcap Technology Index.
Biggest changeMembership in the U.S. all-cap Russell 3000® Index includes the Company in the large-cap Russell 1000® Index and the small-cap Russell 2000® Index. 21 Performance Graph The performance of our common stock is compared with the performance of the NASDAQ Composite Index and the Russell Microcap Technology Index for the fiscal years 2021 to 2025.
The following graph assumes $100 invested on the last day of our fiscal year 2019, in our common stock, the NASDAQ Composite Index and the Russell Microcap Technology Index. Total return indices reflect reinvestment of dividends at the closing stock prices at the date of the dividend declaration.
The following graph assumes $100 invested on the last day of our fiscal year 2020, in our common stock, the NASDAQ Composite Index and the Russell Microcap Technology Index. Total return indices reflect reinvestment of dividends at the closing stock prices at the date of the dividend declaration.
Dividends Our quarterly dividend was $0.06 per common share and $0.054 per Class B common share during fiscal 2024. Annual dividend payments were approximately $3.4 million for fiscal 2024 and $3.3 million for fiscal 2023. All future payments of dividends are at the discretion of the Board of Directors.
Dividends Our quarterly dividend was $0.06 per common share and $0.054 per Class B common share during fiscal 2025. Annual dividend payments were approximately $3.4 million for fiscal 2025 and $3.4 million for fiscal 2024. All future payments of dividends are at the discretion of the Board of Directors.
ITEM 5. Market for the Registrant’s Common Equity, Related S tockholder Matters and Issuer Purchases of Equity Securities Unregistered Sales of Equity Securities There were no sales of unregistered equity securities in fiscal 2024. Share Repurchases There were no share repurchases in fiscal 2024.
ITEM 5. Market for the Registrant’s Common Equity, Related S tockholder Matters and Issuer Purchases of Equity Securities Unregistered Sales of Equity Securities There were no sales of unregistered equity securities in fiscal 2025. Share Repurchases There were no share repurchases in fiscal 2025.
As of July 26, 2024, there were approximately 406 stockholders of record for the common stock and approximately 13 stockholders of record for the Class B common stock. The Company joined the Russell 3000® Index in 2023.
As of July 28, 2025, there were approximately 387 stockholders of record for the common stock and approximately 13 stockholders of record for the Class B common stock. The Company joined the Russell 3000® Index in 2023.
Removed
The Russell Microcap Technology Index is a published industry index comprised of over 150 companies. The performance of our common stock is compared with the performance of the NASDAQ Composite Index and the Russell Microcap Technology Index for the fiscal years 2020 to 2024.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

65 edited+23 added−28 removed28 unchanged
Biggest changeFY22 % Change North America $ 77,269 $ 112,214 $ 98,527 (31.1 %) 13.9 % Asia/Pacific 45,264 59,557 49,235 (24.0 %) 21.0 % Europe 61,476 62,017 64,435 (0.9 %) (3.8 %) Latin America 10,908 28,924 12,439 (62.3 %) 132.5 % Other (1) 1,543 (54 ) (16 ) 2,957.4 % (237.5 %) Total $ 196,460 $ 262,658 $ 224,620 (25.2 %) 16.9 % (1) Primarily includes net sales not allocated to a specific geographical region, unabsorbed value-add costs and other unallocated expenses. 26 Gross profit by geographic area and percent of geographic net sales for fiscal 2024, fiscal 2023 and fiscal 2022 were as follows ( in thousands ): FY 2024 FY 2023 FY 2022 Gross Profit (Loss) Amount % of Net Sales Amount % of Net Sales Amount % of Net Sales North America $ 29,306 37.9 % $ 43,580 38.8 % $ 36,548 37.1 % Asia/Pacific 13,682 30.2 % 18,775 31.5 % 15,728 31.9 % Europe 18,516 30.1 % 18,760 30.2 % 19,215 29.8 % Latin America 3,983 36.5 % 7,735 26.7 % 4,340 34.9 % Other (1) (5,521 ) (5,161 ) (4,131 ) Total $ 59,966 30.5 % $ 83,689 31.9 % $ 71,700 31.9 % (1) Primarily includes net sales not allocated to a specific geographical region, unabsorbed value-add costs and other unallocated expenses.
Biggest changeGross Profit by Geographic Area Gross profit by geographic area and percentage of geographic net sales for fiscal 2025, fiscal 2024 and fiscal 2023 were as follows ( in thousands ): FY 2025 FY 2024 FY 2023 Gross Profit (Loss) Amount % of Net Sales Amount % of Net Sales Amount % of Net Sales North America $ 36,718 40.3 % $ 29,306 37.9 % $ 43,580 38.8 % Asia/Pacific 13,890 32.1 % 13,682 30.2 % 18,775 31.5 % Europe 18,572 28.6 % 18,516 30.1 % 18,760 30.2 % Latin America 3,236 38.7 % 3,983 36.5 % 7,735 26.7 % Other (1) (7,616 ) (5,521 ) (5,161 ) Total $ 64,800 31.0 % $ 59,966 30.5 % $ 83,689 31.9 % (1) Primarily includes net sales not allocated to a specific geographical region, unabsorbed value-add costs and other unallocated expenses. 28 Selling, General and Administrative Expenses Selling, general and administrative expenses (“SG&A”) increased 4.4% during fiscal 2025 to $62.2 million from $59.5 million during fiscal 2024.
Healthcare Net sales for Healthcare increased 5.7% to $12.1 million during fiscal 2024, from $11.4 during fiscal 2023. The increase in sales was primarily due to higher part and CT tube sales. Gross margin as a percentage of net sales decreased slightly to 30.4% during fiscal 2024, compared to 30.7% during fiscal 2023.
Net sales for Healthcare increased 5.7% to $12.1 million during fiscal 2024, from $11.4 million during fiscal 2023. The increase in sales was primarily due to higher part and CT tube sales. Gross margin as a percentage of net sales decreased slightly to 30.4% during fiscal 2024, compared to 30.7% during fiscal 2023.
We had net income of $0.1 million during fiscal 2024, which included non-cash stock-based compensation expense of $1.3 million associated with the issuance of stock option awards and restricted stock awards, $0.6 million of inventory provisions and depreciation and amortization expense of $4.3 million associated with our property and equipment as well as amortization of our intangible assets, and a $1.0 million increase in deferred income taxes.
We had net income of $0.1 million during fiscal 2024, which included non-cash share-based compensation expense of $1.3 million associated with the issuance of stock option awards and restricted stock awards, $0.6 million of inventory provisions and depreciation and amortization expense of $4.3 million associated with our property and equipment as well as amortization of our intangible assets, and a $1.0 million increase in deferred income taxes.
The valuation allowance relates to state NOLs ($1.1 million) and deferred tax assets in foreign jurisdictions where historical taxable losses have been incurred ($1.0 million).
The valuation allowance relates to state NOLs ($1.7 million) and deferred tax assets in foreign jurisdictions where historical taxable losses have been incurred ($1.1 million).
This section is organized as follows: • Business Overview • Results of Operations - an analysis and comparison of our consolidated results of operations for the fiscal years ended June 1, 2024, May 27, 2023 and May 28, 2022, as reflected in our Consolidated Statements of Comprehensive Income. • Liquidity, Financial Position and Capital Resources - a discussion of our primary sources and uses of cash for the fiscal years ended June 1, 2024, May 27, 2023 and May 28, 2022, and a discussion of changes in our financial position.
This section is organized as follows: • Business Overview • Results of Operations - an analysis and comparison of our consolidated results of operations for the fiscal years ended May 31, 2025, June 1, 2024 and May 27, 2023, as reflected in our Consolidated Statements of Comprehensive Income. • Liquidity, Financial Position and Capital Resources - a discussion of our primary sources and uses of cash for the fiscal years ended May 31, 2025, June 1, 2024 and May 27, 2023, and a discussion of changes in our financial position.
Gross margin during fiscal 2024 included expense related to inventory provisions of $0.4 million for PMT, $0.1 million for Canvys and $0.1 million for Healthcare. Consolidated gross profit was $83.7 million during fiscal 2023, compared to $71.7 million during fiscal 2022.
Gross margin during fiscal 2025 included expense related to inventory provisions of $0.4 million for PMT, $0.1 million for Canvys and $0.1 million for Healthcare. Consolidated gross profit was $60.0 million during fiscal 2024, compared to $83.7 million during fiscal 2023.
Income taxes paid, net of refunds, including foreign estimated tax payments, were less than $0.1 million, $4.8 million and $1.5 million, during fiscal 2024, fiscal 2023 and fiscal 2022, respectively. In the normal course of business, we are subject to examination by taxing authorities throughout the world.
Income taxes paid/(refunded), including foreign estimated tax payments, were $1.8 million, less than $0.1 million and $4.8 million, during fiscal 2025, fiscal 2024 and fiscal 2023, respectively. In the normal course of business, we are subject to examination by taxing authorities throughout the world.
During the fourth quarter of fiscal 2024 we increased the valuation allowance on the state net operating losses by $0.9 million resulting in a total valuation allowance against state net operating losses of $1.1 million. We have historically determined that undistributed earnings of our foreign subsidiaries, to the extent of cash available, will be repatriated to the U.S.
During fiscal 2025, we increased the valuation allowance on the state net operating losses by $0.6 million resulting in a total valuation allowance against state net operating losses of $1.7 million. We have historically determined that undistributed earnings of our foreign subsidiaries, to the extent of cash available, will be repatriated to the U.S.
Green Energy Solutions Net sales for GES decreased 51.2% to $23.2 million during fiscal 2024 from $47.6 million during fiscal 2023.
Net sales for GES decreased 51.2% to $23.2 million during fiscal 2024 from $47.6 million during fiscal 2023.
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.
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.
As of June 1, 2024, a valuation allowance of $2.1 million was recorded, representing the portion of the deferred tax asset that management does not believe is more likely than not to be realized. The valuation allowance as of May 27, 2023 was $1.4 million.
As of May 31, 2025, a valuation allowance of $2.8 million was recorded, representing the portion of the deferred tax asset that management does not believe is more likely than not to be realized. The valuation allowance as of June 1, 2024 was $2.1 million.
The difference between the effective income tax rates as compared to the U.S. federal statutory rate of 21.0% during fiscal 2024, fiscal 2023 and fiscal 2022 was primarily driven by the impact of valuation allowance changes related to the realizability of our U.S. state and federal net deferred tax assets and changes in our geographical distribution of income (loss).
The difference between the effective income tax rates as compared to the U.S. federal statutory rate of 21.0% during fiscal 2025, fiscal 2024 and fiscal 2023 reflects changes in the geographical distribution of income (loss) and the impact of valuation allowance changes related to the realizability of our U.S. state net operating loss deferred tax assets.
Cash used in financing activities of $2.9 million during fiscal 2024 resulted primarily from the $3.4 million used to pay dividends to shareholders with a $0.6 million offset for the proceeds from stock option exercises.
Cash used in financing activities of $3.2 million during fiscal 2025 resulted primarily from the $3.4 million used to pay dividends to stockholders with a $0.3 million offset for the proceeds from stock option exercises.
Our net inventories include finished goods, raw materials and work-in-progress. We do not anticipate any material risks or uncertainties related to possible future inventory write-downs. Provisions for obsolete or slow-moving inventories are recorded based upon regular analysis of stock rotation privileges, obsolescence, the exiting of certain markets and assumptions about future demand and market conditions.
We do not anticipate any material risks or uncertainties related to possible future inventory write-downs. Provisions for obsolete or slow-moving inventories are recorded based upon regular analysis of stock rotation privileges, obsolescence, the exiting of certain markets and assumptions about future demand and market conditions.
Years prior to fiscal 2015 are closed for examination under the statute of limitation for U.S. federal and U.S. state. In the Netherlands, years prior to fiscal 2019 are closed for examination. We are under examination in Germany for fiscal years 2019 to 2022. We have no current open audits in the U.S.
Years prior to fiscal 2015 are closed for examination under the statute of limitation for U.S. federal and U.S. state. In The Netherlands, years prior to fiscal 2020 are closed for examination. We are under examination in Germany for fiscal years 2019 to 2022.
Sales for PMT decreased by 21.7%, GES sales decreased by 51.2%, Canvys sales decreased by 17.5% and Healthcare sales increased by 5.7%. The decrease in PMT was mainly due to lower sales of semi-wafer fabrication products and RF and microwave products.
During fiscal 2024, consolidated net sales decreased by 25.2% compared to fiscal 2023. Sales for PMT decreased by 21.7%, GES sales decreased by 51.2%, Canvys sales decreased by 17.5% and Healthcare sales increased by 5.7%. The decrease in PMT was mainly due to lower sales of semi-wafer fabrication products and RF and microwave products.
Cash used by investing activities during fiscal 2024 was due to the $4.0 million of capital expenditures. Those capital expenditures were primarily related to our LaFox manufacturing business and facility renovation and IT systems.
Cash used by investing activities during fiscal 2024 was due to the $4.0 million of capital expenditures. Those capital expenditures were primarily related to our LaFox manufacturing business and facility renovation and IT systems. Our purchases and proceeds from investments consisted of time deposits and CDs.
Net Sales and Gross Profit Analysis Net sales by segment and percent change for fiscal 2024, fiscal 2023 and fiscal 2022 were as follows ( in thousands ): Net Sales FY 2024 FY 2023 FY 2022 FY24 vs. FY23 % Change FY23 vs.
Net Sales and Gross Profit Analysis Net sales by segment and percentage change for fiscal 2025, fiscal 2024 and fiscal 2023 were as follows ( in thousands ): Net Sales FY 2025 FY 2024 FY 2023 FY25 vs. FY24 % Change FY24 vs.
Business Overview Richardson Electronics, Ltd. (the "Company," "we," "our") is a leading global manufacturer of engineered solutions, power grid and microwave tubes and related consumables; power conversion and RF and microwave components; high-value replacement parts, tubes and service training for diagnostic imaging equipment; and customized display solutions.
Business Overview 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.
Our purchases and proceeds from investments consist of time deposits and CDs. Purchasing of future investments may vary from period to period due to interest and foreign currency exchange rates. Cash Flows from Financing Activities The cash flow from financing activities primarily consists of cash dividends paid.
Purchasing of future investments may vary from period to period due to interest and foreign currency exchange rates. Cash Flows from Financing Activities Cash flow from financing activities primarily consists of cash dividends paid.
As of June 1, 2024, we recorded a $0.9 million valuation allowance on state NOLs as there was more negative evidence which limited the Company’s ability to utilize the state NOLs, including the anticipated expiration of some state NOLs prior to utilization and legislation restrictions for some states.
As of May 31, 2025, we recorded an additional $0.6 million valuation allowance on state NOLs as there was more negative evidence which limited the Company’s ability to utilize the state NOLs, including the anticipated expiration of some state NOLs prior to utilization and legislation restrictions for some states.
The increase in Healthcare was primarily due to an increase in equipment sales. 24 Gross profit by segment and percent of segment net sales for fiscal 2024, fiscal 2023 and fiscal 2022 were as follows ( in thousands ): Gross Profit FY 2024 FY 2023 FY 2022 PMT $ 38,717 30.1 % $ 54,089 32.9 % $ 50,810 32.7 % GES 6,607 28.4 % 13,719 28.8 % 7,231 32.0 % Canvys 10,973 33.8 % 12,375 31.5 % 11,252 32.0 % Healthcare 3,669 30.4 % 3,506 30.7 % 2,407 21.2 % Total $ 59,966 30.5 % $ 83,689 31.9 % $ 71,700 31.9 % Gross profit reflects the distribution and manufacturing product margin less manufacturing variances, inventory obsolescence charges, customer returns, scrap and cycle count adjustments, engineering costs and other provisions.
The increase in Healthcare was primarily due to higher parts and CT tube sales. 25 Gross profit by segment and percentage of segment net sales for fiscal 2025, fiscal 2024 and fiscal 2023 were as follows ( in thousands ): Gross Profit FY 2025 FY 2024 FY 2023 PMT $ 42,555 30.9 % $ 38,717 30.1 % $ 54,089 32.9 % GES 9,030 31.4 % 6,607 28.4 % 13,719 28.8 % Canvys 10,889 32.9 % 10,973 33.8 % 12,375 31.5 % Healthcare 2,326 25.0 % 3,669 30.4 % 3,506 30.7 % Total $ 64,800 31.0 % $ 59,966 30.5 % $ 83,689 31.9 % Gross profit reflects the distribution and manufacturing product margin less manufacturing variances, inventory obsolescence charges, customer returns, scrap and cycle count adjustments, engineering costs and other provisions.
Gross margin during fiscal 2023 included expense related to inventory provisions of $0.3 million for PMT, $0.1 million for Canvys and $0.1 million for Healthcare. Power and Microwave Technologies Net sales for PMT decreased 21.7% to $128.7 million during fiscal 2024 from $164.3 million during fiscal 2023.
Gross margin during fiscal 2024 included expense related to inventory provisions of $0.4 million for PMT, $0.1 million for Canvys and $0.1 million for Healthcare. Power and Microwave Technologies Net sales for PMT increased 7.0% to $137.8 million during fiscal 2025 from $128.7 million during fiscal 2024.
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 further information. Cash and cash equivalents were $25.0 million at May 27, 2023.
See Note 9, Income Taxes , from the notes to our consolidated financial statements in Part II, Item 8 of this Annual Report on Form 10-K for further information. Cash and cash equivalents were $24.3 million at June 1, 2024.
Net sales by geographic area and percent change for fiscal 2024, fiscal 2023 and fiscal 2022 were as follows ( in thousands ): Net Sales FY 2024 FY 2023 FY 2022 FY24 vs. FY23 % Change FY23 vs.
The net sales by geographic area and percentage change for fiscal 2025, fiscal 2024 and fiscal 2023 were as follows ( in thousands ): Net Sales FY 2025 FY 2024 FY 2023 FY25 vs. FY24 % Change FY24 vs.
We currently operate within the following major geographic regions: North America, Asia/Pacific, Europe and Latin America. 23 Results of Operations Overview - Fiscal Year Ended June 1, 2024 • Fiscal 2024 contained 53 weeks and fiscal 2023 contained 52 weeks. • Net sales during fiscal 2024 were $196.5 million, down 25.2%, compared to net sales of $262.7 million during fiscal 2023. • Gross margin was 30.5% of net sales during fiscal 2024, compared to 31.9% of net sales during fiscal 2023. • Selling, general and administrative expenses were $59.5 million, or 30.3% of net sales, during fiscal 2024, compared to $58.7 million, or 22.4% of net sales, during fiscal 2023. • Operating income during fiscal 2024 was $0.3 million, compared to an operating income of $25.0 million during fiscal 2023. • Other expense during fiscal 2024 was $0.2 million, compared to other income of less than $0.1 million during fiscal 2023. • Net income during fiscal 2024 was $0.1 million, compared to a net income of $22.3 million during fiscal 2023.
We currently operate within the following major geographic regions: North America, Asia/Pacific, Europe and Latin America. 24 Results of Operations Overview - Fiscal Year Ended May 31, 2025 • Fiscal 2025 contained 52 weeks and fiscal 2024 contained 53 weeks. • Net sales during fiscal 2025 were $208.9 million, up 6.3%, compared to net sales of $196.5 million during fiscal 2024. • Gross margin was 31.0% of net sales during fiscal 2025, compared to 30.5% of net sales during fiscal 2024. • Selling, general and administrative expenses were $62.2 million, or 29.8% of net sales, during fiscal 2025, compared to $59.5 million, or 30.3% of net sales, during fiscal 2024. • Operating loss during fiscal 2025 was $2.5 million, compared to an operating income of $0.3 million during fiscal 2024. • Other income during fiscal 2025 was $0.9 million, compared to other expense of $0.2 million during fiscal 2024. • Net loss during fiscal 2025 was $1.1 million, compared to a net income of $0.1 million during fiscal 2024.
Contractual Obligations Contractual obligations are presented in the table below as of June 1, 2024 ( in thousands ): Less than 1 year 1 - 3 years 4 - 5 years More than 5 years Less Interest Total Lease obligations (1) $ 1,294 $ 1,505 $ 142 $ — $ (181 ) $ 2,760 (1) Lease obligations are related to certain warehouse and office facilities under non-cancelable operating leases as well as financing leases. 30 Critical Accounting Estimates 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.
Contractual Obligations Contractual obligations are presented in the table below as of May 31, 2025 ( in thousands ): Less than 1 year 1 - 3 years Less Interest Total Lease obligations (1) $ 1,258 $ 1,145 $ (127 ) $ 2,276 (1) Lease obligations are related to certain warehouse and office facilities under non-cancelable operating leases. 32 Critical Accounting Estimates The preparation of financial statements in conformity with United States Generally Accepted Accounting Principles (“US 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.
Nearly 55% of our products are manufactured at our facilities located in LaFox, Illinois, Marlborough, Massachusetts and Donaueschingen, Germany, or by one of our manufacturing partners throughout the world. We serve customers in the alternative energy, healthcare, aviation, broadcast, communications, industrial, marine, medical, military, scientific and semiconductor markets.
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.
Consolidated gross profit was $60.0 million during fiscal 2024, compared to $83.7 million during fiscal 2023.
Consolidated gross profit was $64.8 million during fiscal 2025, compared to $60.0 million during fiscal 2024.
Gross margin as a percentage of net sales decreased to 30.1% during fiscal 2024 as compared to 32.9% during fiscal 2023, primarily due to unfavorable product mix and manufacturing under absorption. Net sales for PMT increased 5.7% to $164.3 million during fiscal 2023 from $155.4 million during fiscal 2022.
Gross margin as a percentage of net sales decreased to 30.1% during fiscal 2024 as compared to 32.9% during fiscal 2023, primarily due to unfavorable product mix and manufacturing under absorption. 26 Green Energy Solutions Net sales for GES increased 23.6% to $28.7 million during fiscal 2025 from $23.2 million during fiscal 2024.
We repatriated $0.3 million to the United States in the second quarter of fiscal 2024 from our entity in Mexico. 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.
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.
We had net income of $22.3 million during fiscal 2023, which included non-cash stock-based compensation expense of $0.9 million associated with the issuance of stock option awards and restricted stock awards, $0.5 million of inventory provisions and depreciation and amortization expense of $3.7 million associated with our property and equipment as well as amortization of our intangible assets.
Other cash provided during fiscal 2025 included non-cash share-based compensation expense of $1.5 million associated with the issuance of stock option awards and restricted stock awards, $0.6 million of inventory provisions and $4.0 million from depreciation and amortization expense associated with our property and equipment as well as amortization of our intangible assets.
Cash provided by financing activities of $0.4 million during fiscal 2023 resulted primarily from the $3.8 million of proceeds from the issuance of common stock from stock option exercises and the $3.3 million used to pay dividends to shareholders. All future payments of dividends are at the discretion of the Board of Directors.
Cash used in financing activities of $2.9 million during fiscal 2024 resulted primarily from the $3.4 million used to pay dividends to stockholders with a $0.6 million offset for the proceeds from stock option exercises. All future payments of dividends are at the discretion of the Board of Directors.
The Company recorded a $0.1 million uncertain tax position as of June 1, 2024 as compared to not recording an uncertain tax position as of May 27, 2023. We record interest related to uncertain tax positions in the income tax expense line item within the Consolidated Statements of Comprehensive Income.
We have no other current open audits in the U.S. The Company recorded $0.3 million related to uncertain tax positions as of May 31, 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 Consolidated Statements of Comprehensive Income.
Net deferred tax assets related to foreign NOL carryforwards was $0.1 million as of June 1, 2024, and $0.2 million as of May 27, 2023 with various or indefinite expiration dates.
Net deferred tax assets related to domestic state net operating loss ("NOL") carryforwards amounted to approximately $1.9 million as of May 31, 2025 and $1.8 million as of June 1, 2024. Net deferred tax assets related to foreign NOL carryforwards were $0.1 million as of both May 31, 2025 and June 1, 2024 with various or indefinite expiration dates.
The weight of this positive evidence is sufficient to outweigh other negative evidence in evaluating our need for a valuation allowance in the U.S. federal jurisdiction.
The weight of this positive evidence is sufficient to outweigh other negative evidence in evaluating our need for a valuation allowance in the U.S. federal jurisdiction. As a result of the positive evidence outweighing the negative evidence for the year ended May 31, 2025, no additional valuation allowance on the U.S. federal deferred tax items was recorded.
FY22 % Change PMT $ 128,697 $ 164,299 $ 155,445 (21.7 %) 5.7 % GES 23,233 47,596 22,611 (51.2 %) 110.5 % Canvys 32,444 39,331 35,187 (17.5 %) 11.8 % Healthcare 12,086 11,432 11,377 5.7 % 0.5 % Total $ 196,460 $ 262,658 $ 224,620 (25.2 %) 16.9 % During fiscal 2024, consolidated net sales decreased by 25.2% compared to fiscal 2023.
FY23 % Change PMT $ 137,752 $ 128,697 $ 164,299 7.0 % (21.7 %) GES 28,719 23,233 47,596 23.6 % (51.2 %) Canvys 33,145 32,444 39,331 2.2 % (17.5 %) Healthcare 9,293 12,086 11,432 (23.1 %) 5.7 % Total $ 208,909 $ 196,460 $ 262,658 6.3 % (25.2 %) During fiscal 2025, consolidated net sales increased by 6.3% compared to fiscal 2024.
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.
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.
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.
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 certain assets to DirectMed, the Company manufactures and repairs CT tubes and sells them exclusively to DirectMed under a supply agreement.
The effective income tax rates during fiscal 2024, fiscal 2023 and fiscal 2022 were 61.4%, 10.8% and (13.7%), respectively.
Income Tax (Benefit) Provision Our income tax (benefit) provision during fiscal 2025, fiscal 2024 and fiscal 2023 was ($0.4) million, $0.1 million and $2.7 million, respectively. The effective income tax rates during fiscal 2025, fiscal 2024 and fiscal 2023 were 25.4%, 61.4% and 10.8%, respectively.
The majority of the decrease in receivables reflected lower sales revenue compared to the prior year fourth quarter. The decrease in accounts payable and accrued liabilities was due to lower year-end accruals and timing. Operating activities utilized $8.2 million of cash during fiscal 2023.
The majority of the decrease in receivables reflected lower sales revenue compared to the prior year fourth quarter. The decrease in accounts payable and accrued liabilities was due to lower year-end accruals and timing. Cash Flows from Investing Activities Cash flow from investing activities consisted primarily of proceeds from the disposal of Healthcare assets and capital expenditures.
As of the end of fiscal 2024 and the date of this report, no amounts were outstanding under the Revolving Credit Facility. Cash Flows from Operating Activities Cash flow from operating activities primarily resulted from our net income adjusted for non-cash items and changes in our operating assets and liabilities. Operating activities provided $6.5 million of cash during fiscal 2024.
Cash Flows from Operating Activities Cash flow from operating activities primarily resulted from our net income (loss) adjusted for non-cash items and changes in our operating assets and liabilities. Operating activities provided $10.6 million of cash during fiscal 2025.
Selling, General and Administrative Expenses Selling, general and administrative expenses (“SG&A”) increased 1.4% during fiscal 2024 to $59.5 million from $58.7 million during fiscal 2023. This increase in SG&A from fiscal 2023 was mainly due to higher R&D expenses, partially offset by lower incentives due to financial performance.
This increase in SG&A from fiscal 2023 was mainly due to higher R&D expenses, partially offset by lower incentives due to financial performance. SG&A as a percentage of sales increased to 30.3% during fiscal 2024 as compared to 22.4% during fiscal 2023.
Cash and cash equivalents by geographic area at May 27, 2023 consisted of $8.1 million in North America, $8.6 million in Europe, $1.5 million in Latin America and $6.8 million in Asia/Pacific. No funds were repatriated to the United States in fiscal 2023 from our foreign entities.
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.
We sell our products to customers in diversified industries and perform periodic credit evaluations of our customers’ financial condition. Terms are generally on open account, payable net 30 days in North America, and vary throughout Asia/Pacific, Europe and Latin America. Estimates of credit losses are recorded in the financial statements based on monthly reviews of outstanding accounts.
The decrease was primarily due to increased manufacturing under absorption, offset by an improved product mix. 27 Sales by Geographic Area We sell our products to customers in diversified industries and perform periodic credit evaluations of our customers’ financial condition. Terms are generally open account, payable net 30 days in North America, and vary throughout Asia/Pacific, Europe and Latin America.
Sales decreased primarily due to lower sales in the North American market resulting from high interest rates negatively impacting our medical OEM customers. Gross margin as a percentage of net sales increased to 33.8% during fiscal 2024 as compared to 31.5% during fiscal 2023 due to product mix and lower freight costs.
Net sales for Canvys decreased 17.5% to $32.4 million during fiscal 2024, from $39.3 million during fiscal 2023. Sales decreased primarily due to lower sales in the North American market resulting from high interest rates negatively impacting our medical OEM customers.
Net sales for Canvys increased 11.8% to $39.3 million during fiscal 2023, from $35.2 million during fiscal 2022. Sales increased primarily due to strong sales in the North American market. Gross margin as a percentage of net sales decreased to 31.5% during fiscal 2023 as compared to 32.0% during fiscal 2022 mainly due to product mix.
Canvys Net sales for Canvys increased 2.2% to $33.1 million during fiscal 2025, from $32.4 million during fiscal 2024 due to higher sales in the North American markets. Gross margin as a percentage of net sales decreased to 32.9% during fiscal 2025 as compared to 33.8% during fiscal 2024 due to product mix and higher freight costs.
Management assesses the available positive and negative evidence to estimate if sufficient future taxable income will be generated to support a more likely than not assertion that its deferred tax assets will be realized. A significant component of objective evidence evaluated was the cumulative income or loss incurred in each jurisdiction over the three-year period ended June 1, 2024.
There was no deferred tax liability related to undistributed earnings of our foreign subsidiaries in fiscal 2025 and less than $0.1 million in fiscal 2024. 29 Management assesses the available positive and negative evidence to estimate if sufficient future taxable income will be generated to support a more likely than not assertion that its deferred tax assets will be realized.
Consolidated gross margin as a percentage of net sales was 31.9 % for fiscal 2023, the same as the 31.9% during fiscal 2022, primarily due to favorable product mix for PMT, unfavorable product mix for GES, unfavorable product mix for Canvys and improved manufacturing absorption and decreased component scrap for Healthcare.
Consolidated gross margin as a percentage of net sales was 31.0% for fiscal 2025, compared to the 30.5% during fiscal 2024, primarily due to favorable product mix partially offset by manufacturing under absorption for PMT, favorable product mix of increased Engineered Solution products for GES, unfavorable product mix and higher freight costs for Canvys and a reduction in higher margin spare parts and higher component scrap for Healthcare.
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. 22 The Company reports its financial performance based on the operating and reportable segments defined as follows: 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.
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.
Cash used by investing activities of $2.2 million during fiscal 2023 was mainly attributed to $7.4 million in capital expenditures with a $5.0 million offset for the maturities of a Certificate of Deposit (CD). Capital expenditures were primarily related to our LaFox manufacturing business and facility renovation, IT systems and the Healthcare business.
Cash provided by investing activities of $4.0 million during fiscal 2025 was due to $6.8 million from the proceeds from the sale of Healthcare assets partially offset by $2.8 million of capital expenditures. The capital expenditures were primarily related to our LaFox manufacturing business and facility improvements and IT systems.
The decrease was mainly due to lower sales of semi-wafer fabrication products reflecting the cyclical slowdown in that market. RF and Wireless sales were also down due to a slowdown in the infrastructure business in Asia. However, the health of the business continues to be strong as we gain market share with new products and customers.
Net sales for PMT decreased 21.7% to $128.7 million during fiscal 2024 from $164.3 million during fiscal 2023. The decrease was mainly due to lower sales of semi-wafer fabrication products reflecting the cyclical slowdown in that market. RF and Wireless sales were also down due to a slowdown in the infrastructure business in Asia.
Gross margin as a percentage of net sales decreased to 28.8% during fiscal 2023 as compared to 32.0% during fiscal 2022, primarily due to product mix. 25 Canvys Net sales for Canvys decreased 17.5% to $32.4 million during fiscal 2024, from $39.3 million during fiscal 2023.
Gross margin as a percentage of net sales increased to 33.8% during fiscal 2024 as compared to 31.5% during fiscal 2023 due to product mix and lower freight costs. Healthcare Net sales for Healthcare decreased 23.1% to $9.3 million during fiscal 2025, from $12.1 million during fiscal 2024.
Changes in our operating assets and liabilities resulted in a use of cash of $35.5 million during fiscal 2023, mainly due to an increase in inventories of $30.5 million, a decrease in accounts payable and accrued liabilities of $4.4 million and an increase in prepaid expenses of $0.5 million.
Changes in our operating assets and liabilities provided cash of $4.8 million during fiscal 2025, mainly due to a decrease in receivables of $0.1 million, a decrease in inventories of $0.2 million and a $4.3 million net increase in accounts payable and accrued liabilities The increase in accounts payable and accrued liabilities was due to higher year-end accruals and timing. 31 Operating activities provided $6.5 million of cash during fiscal 2024.
This increase in SG&A expense from fiscal 2022 was mainly due to higher employee compensation and travel expenses, partially offset by lower legal fees and a lower bad debt expense. SG&A as a percentage of sales decreased to 22.4% during fiscal 2023 as compared to 24.8% during fiscal 2022.
This increase in SG&A from fiscal 2024 mainly reflected higher incentives due to sales growth, partially offset by lower Research and Development ("R&D") expenses. SG&A as a percentage of sales decreased to 29.8% during fiscal 2025 as compared to 30.3% during fiscal 2024. SG&A increased 1.4% during fiscal 2024 to $59.5 million from $58.7 million during fiscal 2023.
The foreign exchange loss reported for fiscal 2024 totaled $0.4 million compared to $0.3 million for fiscal 2023. We currently do not utilize derivative instruments to manage our exposure to foreign currency. Income Tax Provision Our income tax provision (benefit) during fiscal 2024, fiscal 2023 and fiscal 2022 was $0.1 million, $2.7 million and ($2.2 million), respectively.
Our foreign exchange gains and losses are primarily due to the translation of U.S. dollars held in non-U.S. entities. The foreign exchange gain reported for fiscal 2025 totaled $0.5 million compared to a loss of $0.4 million for fiscal 2024. We currently do not utilize derivative instruments to manage our exposure to foreign currency.
The increase was mainly due to strong growth in the semi-wafer fabrication industry for the first nine months and the RF and microwave products for various applications. Gross margin as a percentage of net sales increased to 32.9% during fiscal 2023 as compared to 32.7% during fiscal 2022, primarily due to product mix.
The increase was due primarily to increased sales of engineered solutions for the semiconductor wafer fabrication market and increases in RF and Wireless components. Gross margin as a percentage of net sales increased to 30.9% during fiscal 2025 as compared to 30.1% during fiscal 2024, primarily due to favorable product mix partially offset by manufacturing under absorption.
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 $3.7 million of the credit line to address short-term cash requirements and repaid that $3.7 million during the fiscal 2024.
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.
New Accounting Pronouncements A summary of the New Accounting Pronouncements is provided in Note 3, Significant Accounting Policies and Disclosures. 32
New Accounting Pronouncements A summary of the New Accounting Pronouncements is provided in Note 4, Significant Accounting Policies and Disclosures, of the notes to our consolidated financial statements in Part II, Item 8 of this Annual Report on Form 10-K. 33
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 June 1, 2024. 28 Liquidity, Financial Position and Capital Resources Our operations and cash needs have been primarily financed through income from operations and cash on hand.
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 May 31, 2025. Subsequent to year end, on July 4, 2025, the One Big Beautiful Bill Act (“OBBBA”) was signed into law.
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.
Some of the Company's products are manufactured in China and imported into the United States. Accordingly, the Company’s operations are subject to tariffs and other trade protection measures.
This analysis requires management judgment with respect to changes in technology, the continued success of product lines and future volume, revenue and expense growth rates. Income Taxes We recognize deferred tax assets and liabilities based on the differences between financial statement carrying amounts and the tax bases of assets and liabilities.
If future demand changes in an industry or market conditions differ from management’s estimates, additional provisions may be necessary. Income Taxes We recognize deferred tax assets and liabilities based on the differences between financial statement carrying amounts and the tax bases of assets and liabilities.
The deferred tax liability on the outside basis difference is now primarily withholding tax on future dividend distributions. The deferred tax liability related to undistributed earnings of our foreign subsidiaries was less than $0.1 million in both fiscal 2024 and fiscal 2023.
The deferred tax liabilities on the outside basis difference is now primarily withholding tax on future dividend distributions.
We believe the assumptions, judgments and estimates involved for the following have the greatest potential impact on our Consolidated Financial Statements: • Allowance for Credit Losses • Revenue Recognition • Inventories, net • Intangible and Long-Lived Assets • Income Taxes Allowance for Credit Losses Our allowance for credit losses includes estimated losses that result from uncollectible receivables.
We believe the assumptions, judgments and estimates involved for the following have the greatest potential impact on our consolidated financial statements: • Inventories, net • Income Taxes Inventories, net Our consolidated inventories are stated at the lower of cost and net realizable value, generally using a weighted-average cost method. Our net inventories include finished goods, raw materials and work-in-progress.
A number of the Company's products manufactured in China are subject to duties of 25% when imported into the United States. Management continues to work with its suppliers as well as its customers to mitigate the impact of the tariffs on our customers’ markets.
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.
Removed
The increase in Healthcare was primarily due to higher part and CT tube sales. During fiscal 2023, consolidated net sales increased by 16.9% compared to fiscal 2022. Sales for PMT increased by 5.7%, GES sales increased by 110.5%, Canvys sales increased by 11.8% and Healthcare sales increased by 0.5%.
Added
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.
Removed
The increase in PMT was mainly due to strong growth in the semi-wafer fabrication industry and the RF and microwave products for various applications. The increase in GES was primarily due to growth in related product sales to the wind turbine industry, as well as EV battery modules.
Added
Due in part to these measures, some countries are changing their trade policies relating to goods imported from the U.S.
Removed
The increase in Canvys was primarily due to strong sales in the North American market.
Added
These global trade disruptions and geopolitical tensions, together with any related downturns in the global economy, could damp e n customer demand, i ncrease market volatility, and impact currency exchange rates, all which could materially and adversely affect the Company’s financial performance.
Removed
Net sales for GES increased 110.5% to $47.6 million during fiscal 2023 from $22.6 million during fiscal 2022. The increase was mainly due to growth in related product sales to the wind turbine industry, as well as EV battery modules.
Added
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.
Removed
The decrease was primarily due to increased manufacturing under absorption, offset by an improved product mix. Net sales for Healthcare increased 0.5% to $11.4 million during fiscal 2023, essentially unchanged from fiscal 2022. The slight increase in sales was primarily due to an increase in equipment sales, partially offset by decreases in part sales and CT tube sales.
Added
In addition, the impact of trade disruptions on general economic conditions and demand for electronic components is difficult to predict. 23 The recent tariff modifications did not materially impact our fiscal 2025 results.
Removed
Gross margin as a percentage of net sales increased to 30.7% during fiscal 2023, compared to 21.2% during fiscal 2022. The increase was primarily due to improved manufacturing absorption and decreased component scrap expenses. Sales by Geographic Area Our sales are aggregated by the following geographic regions: North America; Asia/Pacific; Europe; Latin America; and Other.
Added
The Company reports its financial performance based on the operating and reportable segments defined as follows: 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.
Removed
SG&A as a percentage of sales increased to 30.3% during fiscal 2024 as compared to 22.4% during fiscal 2023. Selling, general and administrative expenses increased during fiscal 2023 to $58.7 million from $55.7 million during fiscal 2022.
Added
Sales for PMT increased by 7.0%, GES sales increased by 23.6%, Canvys sales increased by 2.2% and Healthcare sales decreased by 23.1%. The increase in PMT was mainly due to increased sales of engineered solutions for the semi-wafer fabrication products and increases in RF and Wireless Components.
Removed
Other Income/Expense Other expense was $0.2 million during fiscal 2024, compared to other income of less than $0.1 million during fiscal 2023. Fiscal 2024 had $0.3 million of investment income the same as fiscal 2023. Our foreign exchange gains and losses are primarily due to the translation of U.S. dollars held in non-U.S. entities.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

5 edited+0 added−0 removed3 unchanged
Biggest changeTotal assets would have declined by an estimated $4.6 million as of the fiscal year ended June 1, 2024 and an estimated $4.3 million as of the fiscal year ended May 27, 2023, while the total liabilities would have decreased by an estimated $1.2 million as of the fiscal year ended June 1, 2024 and an estimated $1.1 million as of the fiscal year ended May 27, 2023.
Biggest changeTotal assets would have declined by an estimated $5.4 million as of the fiscal year ended May 31, 2025 and an estimated $4.6 million as of the fiscal year ended June 1, 2024, while the total liabilities would have decreased by an estimated $1.4 million as of the fiscal year ended May 31, 2025 and an estimated $1.2 million as of the fiscal year ended June 1, 2024.
Our foreign denominated assets and liabilities are cash and cash equivalents, accounts receivable, inventory, accounts payable and intercompany receivables and payables, as we conduct business in countries of the European Union, Asia/Pacific and, to a lesser extent, Canada and Latin America. We do manage foreign exchange exposures by using currency clauses in certain sales contracts.
Our foreign denominated assets and liabilities are cash and cash equivalents, accounts receivable, inventory, accounts payable and intercompany receivables and payables, as we conduct business in countries of the European Union, Asia/Pacific and, to a lesser extent, Canada and Latin America. We manage foreign exchange exposures by using currency clauses in certain sales contracts.
We manage these risks through normal operating and financing activities. Foreign Currency Exposure Even though we take into account current foreign currency exchange rates at the time an order is taken, our financial statements, denominated in a non-U.S. functional currency, are subject to foreign exchange rate fluctuations.
We manage these risks through normal operating and financing activities. Foreign Currency Exposure Even though we consider foreign currency exchange rates at the time an order is taken, our financial statements, denominated in a non-U.S. functional currency, are subject to foreign exchange rate fluctuations.
Had the U.S. dollar changed unfavorably 10% against various foreign currencies, foreign denominated net sales would have been lower by an estimated $10.8 million during fiscal 2024, an estimated $12.2 million during fiscal 2023 and an estimated $12.1 million during fiscal 2022.
Had the U.S. dollar changed unfavorably 10% against various foreign currencies, foreign denominated net sales would have been lower by an estimated $11.3 million during fiscal 2025, an estimated $10.8 million during fiscal 2024 and an estimated $12.2 million during fiscal 2023.
We have not used any derivative instruments nor entered into any forward contracts in fiscal 2024, fiscal 2023 or fiscal 2022.
We have not used any derivative instruments nor entered any forward contracts in fiscal 2025, fiscal 2024 or fiscal 2023.

Other RELL 10-K year-over-year comparisons