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RICHARDSON ELECTRONICS, LTD.

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Business Summary

Richardson Electronics, Ltd. is a 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. The Company serves customers in 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 its core engineering and manufacturing capabilities. The industry is highly competitive, with competition based on price, engineering capability, vendor representation, product diversity, lead times, and the level of customer service. There are very few vacuum tube competitors in the markets served, and a limited number of Chinese manufacturers whose ability to produce vacuum tubes has progressed. The most significant competitive risk comes from technical obsolescence. The Canvys business faces many competitors in the markets it serves.

During fiscal 2026, one customer in the PMT segment accounted for 14% of the Company's consolidated net sales. No single customer represented more than 10% of consolidated net sales in fiscal 2025 or fiscal 2024. The Company maintains over 100,000 part numbers in its product inventory database and estimates that more than 90% of orders received by 6:00 p.m. local time are shipped complete the same day for in-stock product. The Company believes supplier relationships, combined with its engineering design and manufacturing capabilities and private label partnerships, allow it to maintain a well-balanced and technologically advanced offering of customer specific display solutions.

The Company generates revenue through the design, manufacture, and distribution of engineered solutions, green energy products, power grid and microwave tubes, power conversion and RF and microwave components, tubes for diagnostic imaging equipment, and customized display solutions. Revenue is derived from product sales across three reportable segments: Power and Microwave Technologies (PMT), Green Energy Solutions (GES), and Canvys. 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. Customers can access products through the Company's websites, electronic data interchange, or by telephone. Customer orders are processed by regional sales offices and supported primarily by distribution facilities in LaFox, Illinois; Amsterdam, Netherlands; Marlborough, Massachusetts; Donaueschingen, Germany; and Singapore, Singapore. Satellite warehouses are maintained in Sao Paulo, Brazil; Shanghai, China; Bangkok, Thailand; and Hook, United Kingdom.

The Power and Microwave Technologies (PMT) segment combines the Company's core engineered solutions capabilities, power grid and microwave tube business with RF, Wireless and Power technologies. PMT focuses on products for power, RF and microwave applications for customers in 5G, aviation, broadcast, communications, industrial, marine, medical, military, scientific and semiconductor markets. PMT represents leading manufacturers of electron tubes and RF, Microwave and power components used in semiconductor manufacturing equipment, RF and wireless and industrial power applications. PMT also sells proprietary products under trade names including Amperex, Cetron and National. After the sale of certain assets to DirectMed, the Company continues to repair certain CT tubes and sells them exclusively to DirectMed pursuant to a supply agreement. PMT net sales were $160.5 million in fiscal 2026, compared to $147.0 million in fiscal 2025. PMT gross margin as a percentage of net sales was 31.2% in fiscal 2026, compared to 30.5% in fiscal 2025.

The Green Energy Solutions (GES) segment combines key technology partners and engineered solutions capabilities to design and manufacture products for the energy storage market and power management applications. GES focuses on products for green energy applications such as wind, solar, hydrogen and Electric Vehicles, and other power management applications that support green solutions such as synthetic diamond manufacturing. GES net sales were $30.8 million in fiscal 2026, compared to $28.7 million in fiscal 2025. GES gross margin as a percentage of net sales was 30.3% in fiscal 2026, compared to 31.4% in fiscal 2025. The Canvys segment provides customized display solutions serving the corporate enterprise, financial, healthcare, industrial and medical original equipment manufacturers markets. Canvys net sales were $37.3 million in fiscal 2026, compared to $33.1 million in fiscal 2025. Canvys gross margin as a percentage of net sales was 32.0% in fiscal 2026, compared to 32.9% in fiscal 2025.

On January 24, 2025, the Company sold a substantial portion of the assets of its Healthcare business to DirectMed Imaging, LLC and entered into an exclusive 10-year global supply agreement in which Richardson will supply DirectMed with repaired Siemens CT X-ray tubes. During fiscal 2026, the Company paid quarterly dividends of $0.06 per common share and $0.054 per Class B common share. Annual dividend payments were $3.4 million for fiscal 2026 and $3.4 million for fiscal 2025. There were no share repurchases in fiscal 2026. As of July 27, 2026, there were 12,656,822 shares of Common Stock and 2,035,671 shares of Class B Common Stock outstanding. As of July 27, 2026, Edward J. Richardson beneficially owned 98% of the outstanding shares of Class B common stock, representing 61% of the voting power of the outstanding common stock.

Net sales during fiscal 2026 were $228.6 million , up 9.4% , compared to net sales of $208.9 million during fiscal 2025. Gross margin was 31.2% of net sales during fiscal 2026, compared to 31.0% of net sales during fiscal 2025. Selling, general and administrative expenses were $65.7 million , or 28.8% of net sales, during fiscal 2026, compared to $62.2 million , or 29.8% of net sales, during fiscal 2025. Operating income during fiscal 2026 was $6.5 million , compared to an operating loss of $2.5 million during fiscal 2025. Other income during fiscal 2026 was $1.0 million , compared to other income of $0.9 million during fiscal 2025. Net income during fiscal 2026 was $6.4 million , compared to a net loss of $1.1 million during fiscal 2025.

Business Outlook

The Company's growth strategy focuses on expanding its Green Energy Solutions and power conversion businesses. The GES segment focuses on products for numerous green energy applications such as wind, solar, hydrogen and Electric Vehicles, and other power management applications that support green solutions such as synthetic diamond manufacturing. The PMT segment focuses on products for power, RF and microwave applications for customers in 5G, aviation, broadcast, communications, industrial, marine, medical, military, scientific and semiconductor markets. The Company continues to pursue new international sales to further expand its geographic reach. During fiscal 2026, 60% of sales were made outside the United States.

The filing does not contain a dedicated margin and cost outlook section with specific targets.

The Company operates global logistics services through specialized and centralized distribution centers and depends on third party transportation service providers for the delivery of products to customers. The Company maintains over 100,000 part numbers in its product inventory database and estimates that more than 90% of orders received by 6:00 p.m. local time are shipped complete the same day for in-stock product. The Company's 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. As of May 30, 2026, the Company employed 429 individuals, 392 of whom were employed on a full-time basis and 37 of whom were employed on a part-time basis.

The filing does not contain specific R&D spending levels, capital expenditure plans, or share repurchase authorization amounts for the upcoming period. The quarterly dividend was $0.06 per common share and $0.054 per Class B common share during fiscal 2026. Annual dividend payments were $3.4 million for fiscal 2026. All future payments of dividends are at the discretion of the Board of Directors.

The Company faces headwinds from global economic uncertainty, including conflict in Europe and the Middle East, higher inflation or interest rates, recession, natural disasters, and business disruptions. Prolonged periods of inflation could increase costs and impact consumer spending. The Company also faces risks from tariffs on products manufactured in China and imported into the United States. The recent tariff modifications did not materially impact fiscal 2026 results, but further tariffs may be imposed. Supply chain disruptions, including shortages of shipping containers, international port congestion, trucking shortages and freight capacity constraints, have resulted in delays in receiving key manufacturing components and increased order backlogs and transportation costs.

The Company faces risks related to its dependence on a limited number of vendors. During fiscal 2026, two suppliers each represented more than 10% of total cost of sales. The Company also faces customer concentration risk, as one customer in the PMT segment accounted for 14% of consolidated net sales in fiscal 2026. The Company may not achieve its plan for sales growth and margin targets, and has historically incurred significant charges for inventory obsolescence. The Company's growth strategy focuses on expanding its Green Energy Solutions and power conversion businesses, and it may be unable to implement these growth initiatives or reach profitability in the near future.

Risk Factors

The Company faces significant customer concentration risk, as one customer in the PMT segment accounted for 14% of consolidated net sales in fiscal 2026, and the loss of this customer could have a material adverse effect. The Company is dependent on a limited number of vendors, with two suppliers each representing more than 10% of total cost of sales during fiscal 2026, and any disruption in these relationships could adversely impact the business. The Company maintains significant inventories and has historically incurred charges for inventory obsolescence, as technology evolution and changing end-user demand can contribute to inventory decline. The Company's international operations expose it to risks from tariffs, trade protection measures, and currency fluctuations, with 60% of sales made outside the United States and certain products manufactured in China subject to U.S. tariffs. A single stockholder, Edward J. Richardson, beneficially owns 98% of the outstanding Class B common stock, representing 61% of the voting power, which permits him to exert control over stockholder votes including election of directors and significant corporate transactions.

Management Priorities

Management's message emphasizes the Company's strategy to provide specialized technical expertise and engineered solutions based on core engineering and manufacturing capabilities. The Company reported net sales of $228.6 million for fiscal 2026, up 9.4% from $208.9 million in fiscal 2025, and net income of $6.4 million compared to a net loss of $1.1 million in fiscal 2025. Management highlights the sale of a substantial portion of the Healthcare business assets to DirectMed Imaging, LLC on January 24, 2025, and the entry into an exclusive 10-year global supply agreement. The strategic priorities emphasized include expanding the Green Energy Solutions and power conversion businesses, continuing to pursue new international sales to further expand geographic reach, and leveraging the Company's global infrastructure to provide engineered solutions.

View Source Annual Report on SEC.gov ↗

References

  1. [1] Item 7, MD&A — Net Sales and Gross Profit Analysis
  2. [2] Item 7, MD&A — Net Sales and Gross Profit Analysis
  3. [3] Item 7, MD&A — Gross Profit by Segment
  4. [4] Item 7, MD&A — Gross Profit by Segment
  5. [5] Item 7, MD&A — Net Sales and Gross Profit Analysis
  6. [6] Item 7, MD&A — Net Sales and Gross Profit Analysis
  7. [7] Item 7, MD&A — Gross Profit by Segment
  8. [8] Item 7, MD&A — Gross Profit by Segment
  9. [9] Item 7, MD&A — Net Sales and Gross Profit Analysis
  10. [10] Item 7, MD&A — Net Sales and Gross Profit Analysis
  11. [11] Item 7, MD&A — Gross Profit by Segment
  12. [12] Item 7, MD&A — Gross Profit by Segment
  13. [13] Item 5, Market for Registrant’s Common Equity — Dividends
  14. [14] Item 5, Market for Registrant’s Common Equity — Dividends
  15. [15] Item 5, Market for Registrant’s Common Equity — Dividends
  16. [16] Item 5, Market for Registrant’s Common Equity — Dividends
  17. [17] Cover page, share count as of July 27, 2026
  18. [18] Cover page, share count as of July 27, 2026
  19. [19] Item 1A, Risk Factors — Ownership Risks
  20. [20] Item 1A, Risk Factors — Ownership Risks
  21. [21] Item 7, MD&A — Results of Operations Overview
  22. [22] Item 7, MD&A — Results of Operations Overview
  23. [23] Item 7, MD&A — Results of Operations Overview
  24. [24] Item 7, MD&A — Results of Operations Overview
  25. [25] Item 7, MD&A — Results of Operations Overview
  26. [26] Item 7, MD&A — Results of Operations Overview
  27. [27] Item 7, MD&A — Results of Operations Overview
  28. [28] Item 7, MD&A — Results of Operations Overview
  29. [29] Item 7, MD&A — Results of Operations Overview
  30. [30] Item 7, MD&A — Results of Operations Overview
  31. [31] Item 7, MD&A — Results of Operations Overview
  32. [32] Item 7, MD&A — Results of Operations Overview
  33. [33] Item 7, MD&A — Results of Operations Overview
  34. [34] Item 7, MD&A — Results of Operations Overview
  35. [35] Item 7, MD&A — Results of Operations Overview
  36. [36] Item 1, Business — International Sales
  37. [37] Item 1, Business — Employees
  38. [38] Item 1, Business — Employees
  39. [39] Item 1, Business — Employees
  40. [40] Item 5, Market for Registrant’s Common Equity — Dividends
  41. [41] Item 5, Market for Registrant’s Common Equity — Dividends
  42. [42] Item 5, Market for Registrant’s Common Equity — Dividends
  43. [43] Item 1, Business — Major Customers
  44. [44] Item 1, Business — Major Customers
  45. [45] Item 1, Business — International Sales
  46. [46] Item 1A, Risk Factors — Ownership Risks
  47. [47] Item 1A, Risk Factors — Ownership Risks
  48. [48] Item 7, MD&A — Results of Operations Overview
  49. [49] Item 7, MD&A — Results of Operations Overview
  50. [50] Item 7, MD&A — Results of Operations Overview
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  54. [54] Item 7, MD&A — Results of Operations Overview
  55. [55] Item 7, MD&A — Results of Operations Overview
  56. [56] Item 7, MD&A — Results of Operations Overview
  57. [57] Item 8, Financial Statements — Consolidated Statements of Comprehensive Income
  58. [58] Item 8, Financial Statements — Consolidated Statements of Comprehensive Income
  59. [59] Item 7, MD&A — Gross Profit by Segment
  60. [60] Item 7, MD&A — Gross Profit by Segment
  61. [61] Item 7, MD&A — Gross Profit by Segment
  62. [62] Item 7, MD&A — Gross Profit by Segment
  63. [63] Item 7, MD&A — Results of Operations Overview
  64. [64] Item 7, MD&A — Results of Operations Overview
  65. [65] Item 7, MD&A — Results of Operations Overview
  66. [66] Item 7, MD&A — Results of Operations Overview
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  68. [68] Item 7, MD&A — Results of Operations Overview
  69. [69] Item 7, MD&A — Net Sales and Gross Profit Analysis
  70. [70] Item 7, MD&A — Net Sales and Gross Profit Analysis
  71. [71] Item 7, MD&A — Net Sales and Gross Profit Analysis

Analysis on 8/3/2026