UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended ~~March~~August 130, 2025

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from To

Commission File Number: 0-12906

RICHARDSON ELECTRONICS, LTD.

(Exact name of registrant as specified in its charter)

     Delaware

     36-2096643

     (State or other jurisdiction of
     incorporation or organization)

     (I.R.S. Employer
     Identification No.)

40W267 Keslinger Road, P.O. Box 393

LaFox, Illinois 60147-0393

(Address of principal executive offices)

Registrant’s telephone number, including area code: (630) 208-2200

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common stock, $0.05 Par Value	RELL	NASDAQ Global Select Market

Securities registered pursuant to Section 12(g) of the Act: None

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. ☒ Yes ☐ No

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). ☒ Yes ☐ No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer”, “accelerated filer”, “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.


Large Accelerated Filer	☐	Accelerated Filer	☒
Non-Accelerated Filer	☐	Smaller Reporting Company	☒
Emerging Growth Company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). ☐ Yes ☒ No

As of ~~April~~October 76, 2025, there were 12,~~361~~443,~~870~~851 outstanding shares of Common Stock, $0.05 par value and 2,049,~~238~~171 outstanding shares of Class B Common Stock, $0.05 par value, which are convertible into Common Stock of the registrant on a share for share basis.

TABLE OF CONTENTS

		Page
Part I.	Financial Information
Item 1.	Financial Statements	2
	Unaudited Consolidated Balance Sheets	2
	Consolidated Balance Sheets	2
	Unaudited Consolidated Statements of Comprehensive (Loss) Income	3
	Unaudited Consolidated Statements of Comprehensive Income	3
	Unaudited Consolidated Statements of Cash Flows	4
	Unaudited Consolidated Statement of Stockholders’ Equity	5
	Unaudited Consolidated Statements of Stockholders’ Equity	5
	Notes to Unaudited Consolidated Financial Statements	76
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	1817
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	2724
Item 4.	Controls and Procedures	2724
Part II.	Other Information
Item 1.	Legal Proceedings	2825
Item 1A.	Risk Factors	2825
Item 2.	Unregistered Sales of Equity Securities, ~~Use of Proceeds~~ and ~~Issuer~~Use ~~Purchases~~ of ~~Equity Securities~~Proceeds	2825
Item 3.	Defaults Upon Senior Securities	2825
Item 4.	Mine Safety Disclosures	2825
Item 5.	Other Information	2825
Item 6.	Exhibits	2927
Exhibit Index		2927
Signatures		3028

PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

Richardson Electronics, Ltd.

Consolidated Balance Sheets

(in thousands, except per share amounts)

	Unaudited			Audited
	March 1, 2025			June 1, 2024
	August 30, 2025			May 31, 2025
Assets
Current assets:
Cash and cash equivalents	$	3635,~~675~~654		$	2435,~~263~~901
Accounts receivable, less allowance for credit losses of $240 and $323, respectively		24,932			24,845
Accounts receivable, less allowance for credit losses of $301 and $250, respectively		27,039			24,117
Inventories, net		98104,~~369~~635			~~110~~102,~~149~~799
Prepaid expenses and other assets		32,~~538~~948			23,~~397~~070
Total current assets		~~163~~170,~~514~~276			~~161~~165,~~654~~887
Non-current assets:
Property, plant and equipment, net		18,~~138~~439			2018,~~681~~355
Intangible assets, net		~~358~~330			~~1,641~~345
Right of use lease assets		2,~~035~~026			2,~~760~~276
Deferred income tax assets		58,~~565~~695			58,~~500~~744
Other non-current assets		~~200~~301			~~209~~228
Total non-current assets		2629,~~296~~791			3029,~~791~~948
Total assets	$	~~189~~200,~~810~~067		$	~~192~~195,~~445~~835
Liabilities
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable	$	2223,~~485~~172		$	1521,~~458~~339
Accrued liabilities		1114,~~268~~360			1514,~~404~~276
Lease liabilities current		~~986~~1,167			1,~~169~~171
Total current liabilities		3438,~~739~~699			3236,~~031~~786
Non-current liabilities:
Deferred income tax liabilities		7483			9081
Lease liabilities non-current		~~1,049~~859			1,~~591~~105
Other non-current liabilities		1,~~048~~058			~~781~~1,204
Total non-current liabilities		2,~~171~~000			2,~~462~~390
Total liabilities		3640,~~910~~699			3439,~~493~~176
Commitments and contingencies (Note 4)
Stockholders’ Equity
Common stock, $0.05 par value; 12,362 and 12,254 shares issued and outstanding on March 1, 2025 and June 1, 2024, respectively		618			613
Common stock, $0.05 par value; 12,444 and 12,362 shares issued and outstanding on August 30, 2025 and May 31, 2025, respectively		622			618
Class B common stock, convertible, $0.05 par value; 2,049 shares issued and outstanding on March 1, 2025 and June 1, 2024		102			102
Class B common stock, convertible, $0.05 par value; 2,049 shares issued and outstanding on August 30, 2025 and May 31, 2025		102			102
Preferred stock, $1.00 par value, no shares issued		—			—
Additional paid-in-capital		75,044			74,445
Additional paid-in-capital		74,113			72,744
Retained earnings		80,392			79,340
Retained earnings		79,117			83,729
Accumulated other comprehensive income		3,208			2,154
Accumulated other comprehensive (loss) income		(1,050	)		764
Total stockholders' equity		159,368			156,659
Total stockholders' equity		152,900			157,952
Total liabilities and stockholders’ equity	$	200,067		$	195,835
Total liabilities and stockholders’ equity	$	189,810		$	192,445

Refer to the accompanying Notes to Unaudited Consolidated Financial Statements ~~in Part 1, Item 1~~.

Richardson Electronics, Ltd.

Unaudited Consolidated Statements of Comprehensive ~~(Loss)~~ Income

(in thousands, except per share amounts)

	Three Months Ended						~~Nine Months Ended~~
	March 1, 2025			March 2, 2024			March 1, 2025			March 2, 2024
	August 30, 2025			August 31, 2024
Net sales	$	5354,~~804~~607		$	5253,~~375~~725		$	~~157,020~~		$	~~149,086~~
Cost of sales		37,~~131~~678			3637,~~939~~299			~~108,595~~			~~103,844~~
Gross profit		16,~~673~~929			1516,~~436~~426			~~48,425~~			~~45,242~~
Selling, general and administrative expenses		1415,~~500~~961			1416,~~430~~112			~~46,607~~			~~44,710~~
(Gain) loss on disposal of property, plant and equipment		—			—			(4	)		70
Gain on disposal of property, plant and equipment		—			2
Loss on disposal of healthcare assets and related charges		4,916			—			4,916			—
Operating income		968			316
Operating (loss) income		(2,743	)		1,006			(3,094	)		462
Other income (expense):
Other expense (income):
Interest income		169			58
Interest income		(84	)		(67	)		(187	)		(224	)
Foreign exchange gain		289			277
Foreign exchange loss		456			101			616			347
Other, net		904			(3	)
Other, net		(27	)		(7	)		(28	)		43
Total other income		1,362			332
Total other expense		345			27			401			166
Income before income taxes		2,330			648
(Loss) income before income taxes		(3,088	)		979			(3,495	)		296
Income tax provision		421			58
Income tax (benefit) provision		(1,031	)		229			(1,277	)		116
Net income		1,909			590
Net (loss) income		(2,057	)		750			(2,218	)		180
Foreign currency translation gain, net of tax		1,054			636
Foreign currency translation (loss) gain, net of tax		(702	)		(205	)		(1,814	)		385
Comprehensive income	$	2,963		$	1,226
Comprehensive (loss) income	$	(2,759	)	$	545		$	(4,032	)	$	565
Net income per share:
Net (loss) income per share:
Common stock - Basic	$	0.13		$	0.04
Common shares - Basic	$	(0.15	)	$	0.05		$	(0.16	)	$	0.01
Class B common stock - Basic		0.12			0.04
Class B common shares - Basic		(0.13	)		0.05			(0.14	)		0.01
Common stock - Diluted		0.13			0.04
Common shares - Diluted		(0.15	)		0.05			(0.16	)		0.01
Class B common stock - Diluted		0.12			0.04
Class B common shares - Diluted		(0.13	)		0.05			(0.14	)		0.01
Weighted average number of shares:
Weighted average number of shares:
Common stock – Basic		12,393			12,200
Common shares – Basic		12,333			12,227			12,283			12,208
Class B common stock – Basic		2,049			2,049
Class B common shares – Basic		2,049			2,052			2,049			2,052
Common stock – Diluted		12,544			12,431
Common shares – Diluted		12,333			12,445			12,283			12,480
Class B common stock – Diluted		2,049			2,049
Class B common shares – Diluted		2,049			2,052			2,049			2,052

Refer to the accompanying Notes to Unaudited Consolidated Financial Statements ~~in Part 1, Item 1~~.

Richardson Electronics, Ltd.

Unaudited Consolidated Statements of Cash Flows

(in thousands)

	Three Months Ended						~~Nine Months Ended~~
	March 1, 2025			March 2, 2024			March 1, 2025			March 2, 2024
	August 30, 2025			August 31, 2024
Operating activities:
Net (loss) income	$	(2,057	)	$	750		$	(2,218	)	$	180
Net income	$	1,909		$	590
Adjustments to reconcile net (loss) income to cash provided by (used in) operating activities:
Adjustments to reconcile net income to cash provided by operating activities:
Unrealized foreign currency loss (gain)		456			5			429			(300	)
Unrealized foreign currency gain		(511	)		(382	)
Depreciation and amortization		~~978~~971			1,~~104~~044			~~3,037~~			~~3,218~~
Inventory provisions		~~123~~102			~~173~~139			~~346~~			~~450~~
Share-based compensation expense		~~320~~641			~~279~~593			~~1,226~~			~~1,045~~
(Gain) loss on disposal of property, plant and equipment		—			—			(4	)		70
Gain on disposal of property, plant and equipment		—			(2	)
Deferred income taxes		(349	)		(458	)		~~(82~~	)		42
Loss on disposal of healthcare assets and related charges		4,916			—			4,916			—
Change in assets and liabilities:
Change in assets and liabilities:
Accounts receivable		(2,654	)		(5,858	)
Accounts receivable		(333	)		(5,254	)		(1,470	)		998
Inventories		(578	)		(124	)
Inventories		2,873			3,974			1,132			(2,246	)
Prepaid expenses and other assets		60			(29	)
Prepaid expenses and other assets		(382	)		151			(344	)		(58	)
Accounts payable		1,626			4,164
Accounts payable		2,585			(4,072	)		7,249			(5,204	)
Accrued liabilities		(150	)		(95	)
Accrued liabilities		(4,661	)		247			(4,115	)		625
Other		(98	)		430
Other		(214	)		116			376			464
Net cash provided by operating activities		1,367			412
Net cash provided by (used in) operating activities		4,601			(2,531	)		10,478			(716	)
Investing activities:
Investing activities:
Capital expenditures		(1,025	)		(926	)
Capital expenditures		(549	)		(401	)		(1,992	)		(3,057	)
Proceeds from sale of property, plant and equipment		—			7
Proceeds from sale of property, plant & equipment		—			—			7			—
Net cash used in investing activities		(1,025	)		(919	)
Proceeds from disposal of Healthcare assets		6,985			—			6,985			—
Financing activities:
Net cash provided by (used in) investing activities		6,436			(401	)		5,000			(3,057	)
Proceeds from issuance of common stock		61			144
Financing activities:
Cash dividends paid on common and Class B common stock		(857	)		(850	)
Proceeds from issuance of common stock		—			—			307			342
Proceeds from revolving credit facility		—			1,000
Cash dividends paid on common and Class B common stock		(852	)		(844	)		(2,555	)		(2,532	)
Repayment of revolving credit facility		—			(1,000	)
Proceeds from revolving credit facility		—			3,744			1,000			3,744
Other		(99	)		(162	)
Repayment of revolving credit facility		—			(3,744	)		(1,000	)		(3,744	)
Net cash used in financing activities		(895	)		(868	)
Other		—			—			(159	)		(119	)
Effect of exchange rate changes on cash and cash equivalents		306			147
Net cash used in financing activities		(852	)		(844	)		(2,407	)		(2,309	)
Decrease in cash and cash equivalents		(247	)		(1,228	)
Effect of exchange rate changes on cash and cash equivalents		(145	)		(113	)		(659	)		(19	)
Cash and cash equivalents at beginning of period		35,901			24,263
Increase (decrease) in cash and cash equivalents		10,040			(3,889	)		12,412			(6,101	)
Cash and cash equivalents at end of period	$	35,654		$	23,035
Cash and cash equivalents at beginning of period		26,635			22,769			24,263			24,981
Cash and cash equivalents at end of period	$	36,675		$	18,880		$	36,675		$	18,880

Refer to the accompanying Notes to Unaudited Consolidated Financial Statements ~~in Part 1, Item 1~~.

Richardson Electronics, Ltd.

Unaudited Consolidated ~~Statement~~Statements of Stockholders’ Equity

(in thousands, except per share amounts)

	Common Stock		Class BCommon Stock		ParValue		AdditionalPaid InCapital			RetainedEarnings			AccumulatedOtherComprehensive ~~(Loss)~~ Income			Total
Balance November 30, 2024		12,359		2,049	$	720	$	73,793		$	82,026		$	(348	)	$	156,191
Balance May 31, 2025		12,362		2,049	$	720	$	74,445		$	79,340		$	2,154		$	156,659
Comprehensive loss:
Comprehensive income:
Net loss		—		—		—		—			(2,057	)		—			(2,057	)
Net income		—		—		—		—			1,909			—			1,909
Foreign currency translation, net of tax		—		—		—		—			—			~~(702~~1,054	)		~~(702~~1,054	)
Share-based compensation:
Restricted stock		—		—		—		~~178~~416			—			—			~~178~~416
Stock options		—		—		—		~~142~~225			—			—			~~142~~225
Common stock:
Options exercised		311		—		—1		—60			—			—			—61
Restricted stock issuance		71		—		3		(102	)		—			—			(99	)
Dividends paid to:
Common ($0.060 per share)		—		—		—		—			(~~742~~746	)		—			(~~742~~746	)
Class B Common ($0.054 per share)		—		—		—		—			(110	)		—			(110	)
Class B common ($0.054 per share)		—		—		—		—			(111	)		—			(111	)
Balance March 1, 2025		12,362		2,049	$	720	$	74,113		$	79,117		$	(1,050	)	$	152,900
Balance August 30, 2025		12,444		2,049	$	724	$	75,044		$	80,392		$	3,208		$	159,368
Balance June 1, 2024		12,254		2,049	$	715	$	72,744		$	83,729		$	764		$	157,952
Comprehensive loss:
Net loss		—		—		—		—			(2,218	)		—			(2,218	)
Foreign currency translation, net of tax		—		—		—		—			161			(1,814	)		(1,653	)
Share-based compensation:
Restricted stock		—		—		—		780			—			—			780
Stock options		—		—		—		446			—			—			446
Common stock:
Options exercised		48		—		2		305			—			—			307
Restricted stock issuance		60		—		3		(162	)		—			—			(159	)
Dividends paid to:
Common ($0.18 per share)		—		—		—		—			(2,223	)		—			(2,223	)
Class B Common ($0.162 per share)		—		—		—		—			(332	)		—			(332	)
Balance March 1, 2025		12,362		2,049	$	720	$	74,113		$	79,117		$	(1,050	)	$	152,900

Refer to the Notes to Unaudited Consolidated Financial Statements in Part 1, Item 1.


	Common Stock		Class B Common Stock		Par Value		Additional Paid In Capital			Retained Earnings			Accumulated Other Comprehensive Income		Total
Balance June 1, 2024:		12,254		2,049	$	715	$	72,744		$	83,729		$	764	$	157,952
Comprehensive income:
Net income		—		—		—		—			590			—		590
Foreign currency translation, net of tax		—		—		—		—			161			636		797
Share-based compensation:
Restricted stock		—		—		—		424			—			—		424
Stock options		—		—		—		169			—			—		169
Common stock:
Options exercised		17		—		1		140			—			—		141
Restricted stock issuance		60		—		3		(162	)		—			—		(159	)
Dividends paid to:
Common ($0.060 per share)		—		—		—		—			(739	)		—		(739	)
Class B common ($0.054 per share)		—		—		—		—			(111	)		—		(111	)
Balance August 31, 2024		12,331		2,049	$	719	$	73,315		$	83,630		$	1,400	$	159,064

Refer to the accompanying Notes to Unaudited Consolidated Financial Statements.

Richardson Electronics, Ltd.

Unaudited Consolidated Statement of Stockholders’ Equity

(in thousands, except per share amounts)

	Common Stock		Class BCommon Stock		ParValue		AdditionalPaid InCapital			RetainedEarnings			AccumulatedOtherComprehensiveIncome (Loss)			Total
Balance December 2, 2023:		12,227		2,052	$	714	$	71,936		$	84,786		$	1,205		$	158,641
Comprehensive income (loss):
Net income		—		—		—		—			750			—			750
Foreign currency translation, net of tax		—		—		—		—			—			(205	)		(205	)
Share-based compensation:
Restricted stock		—		—		—		172			—			—			172
Stock options		—		—		—		107			—			—			107
Dividends paid to:
Common ($0.060 per share)		—		—		—		—			(733	)		—			(733	)
Class B Common ($0.054 per share)		—		—		—		—			(111	)		—			(111	)
Balance March 2, 2024		12,227		2,052	$	714	$	72,215		$	84,692		$	1,000		$	158,621
Balance May 27, 2023:		12,140		2,052	$	710	$	70,951		$	87,044		$	615		$	159,320
Comprehensive income:
Net income		—		—		—		—			180			—			180
Foreign currency translation, net of tax		—		—		—		—			—			385			385
Share-based compensation:
Restricted stock		—		—		—		513			—			—			513
Stock options		—		—		—		532			—			—			532
Common stock:
Options exercised		50		—		2		340			—			—			342
Restricted stock issuance		37		—		2		(121	)		—			—			(119	)
Dividends paid to:
Common ($0.180 per share)		—		—		—		—			(2,199	)		—			(2,199	)
Class B Common ($0.162 per share)		—		—		—		—			(333	)		—			(333	)
Balance March 2, 2024		12,227		2,052	$	714	$	72,215		$	84,692		$	1,000		$	158,621

Refer to the Notes to Unaudited Consolidated Financial Statements in Part 1, Item 1.

RICHARDSON ELECTRONICS, LTD.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

1. DESCRIPTION OF THE COMPANY

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. ~~Approximately~~We ~~50%~~have ofmanufacturing at our ~~products~~facilities ~~are~~located ~~manufactured~~ in LaFox, Illinois, Marlborough, Massachusetts, orand 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. 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.

We serve 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 our core engineering and manufacturing capabilities. The Company products and services include design-in support, systems integration, prototype design and manufacturing, testing, logistics, and aftermarket technical service and repair. Our products include electron tubes and related components, microwave generators, subsystems used in semiconductor manufacturing and visual technology solutions. These products are used to control, switch or amplify electrical power signals, or are used as display devices in a variety of industrial, commercial, medical and communication applications.

~~The~~On January 24, 2025, the Company ~~reports~~sold ~~its~~a ~~financial~~substantial ~~performance~~portion ~~for~~of the ~~following~~assets ~~business~~of ~~segments:~~its ~~Power~~Healthcare ~~and~~business ~~Microwave~~to ~~Technologies~~DirectMed Imaging, LLC (~~"PMT"~~“DirectMed”), ~~Green~~a ~~Energy~~Delaware ~~Solutions~~limited ~~("GES")~~liability company, ~~Canvys~~ and ~~Healthcare.~~entered Ainto ~~description~~an ofexclusive 10-year global supply agreement in which Richardson will supply DirectMed with repaired Siemens CT X-ray tubes. Additionally, the Company's ~~business~~will ~~segments~~continue ismanufacturing ~~provided~~a inlimited ~~Note~~quantity ~~11,~~of ~~Segment~~ALTA ~~and~~CT ~~Geographic~~X-ray ~~Information~~tubes exclusively for DirectMed for approximately twelve months.

OnDuring ~~January 24, 2025,~~ the ~~Company~~year ~~sold~~ended aMay ~~substantial~~31, ~~portion~~2025 ofand ~~the~~prior ~~assets~~we ofhad ~~its~~four ~~Healthcare~~reportable ~~business~~segments: toPower ~~DirectMed~~and ~~Imaging,~~Microwave ~~LLC~~Technologies (~~“DirectMed”~~"PMT"), aGreen ~~Delaware~~Energy ~~limited~~Solutions ~~liability~~("GES"), ~~company~~Canvys, and ~~entered~~Healthcare. ~~into~~As anof ~~exclusive~~June ~~10-year~~1, ~~global~~2025, ~~supply~~we ~~agreement~~realigned inour ~~which~~operating ~~Richardson~~segment ~~will~~structure ~~supply~~and ~~DirectMed~~now ~~with~~have ~~repaired~~three ~~Siemens~~segments: ~~CT X-ray tubes. Additionally~~PMT, ~~the~~GES ~~Company~~and ~~will~~Canvys. ~~continue~~The ~~manufacturing~~change ~~ALTA~~in CToperating ~~X-ray~~segments ~~tubes~~is ~~for~~predicated ~~DirectMed~~on ~~for~~how ~~approximately~~the 12Company's tochief 18operating ~~months.~~decision Amaker ~~description~~("CODM") ofmakes ~~this~~operating ~~transaction~~decisions and ~~other~~assesses ~~decisions~~business ~~associated~~performance. ~~with~~Prior ~~this~~segment ~~transaction~~information ~~which~~has ~~resulted~~been inrecast ato ~~total~~reflect ~~loss~~the ~~of $4~~realignment.9 ~~million~~Refer ~~being~~to ~~recorded~~Note ~~for~~9, ~~the~~Segment ~~three~~Information, ~~month~~for ~~and~~discussion ~~nine~~of ~~month~~the ~~periods~~Company's ~~ended~~segment ~~March~~reporting 1structure, ~~2025~~including isthe ~~provided~~recent ~~in Note 10, Disposal of Healthcare Assets and Related Charges~~changes.

We currently operate within the following major geographic regions: North America, Asia/Pacific, Europe and Latin America.

2. BASIS OF PRESENTATION

The accompanying Unaudited Consolidated Financial Statements have been prepared in accordance with United States Generally Accepted Accounting Principles (“GAAP”) for interim financial information and the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all the information and notes required by GAAP for complete financial statements.

Our fiscal quarter ends on the Saturday nearest the end of the quarter-ending month. The ~~third~~first quarter of fiscal ~~2025~~2026 and fiscal ~~2024~~2025 both contained 13 weeks. ~~The~~In ~~first~~the ~~nine~~opinion ~~months~~of management, all adjustments, which are of ~~fiscal~~a ~~2025~~normal ~~contained~~and 39recurring ~~weeks~~nature, necessary for a fair presentation of the results of interim periods have been made. All inter-company transactions and balances have been eliminated. The Unaudited Consolidated Financial Statements presented herein include the ~~first~~accounts ~~nine~~of our wholly owned subsidiaries. Certain information and note disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to applicable rules and regulations. The results of our operations for the three months ended August 30, 2025 are not necessarily indicative of the results that may be expected for the fiscal ~~2024~~year ~~contained~~ending 40May ~~weeks.~~30, 2026.

InAs ~~the~~described ~~opinion~~in ofNote ~~management~~1, ~~all~~Description ~~adjustments, which are~~ of athe ~~normal and recurring nature~~Company, ~~necessary for a fair presentation of~~ the ~~results~~Company ofreports ~~interim~~its ~~periods~~financial ~~have~~performance ~~been~~based ~~made.~~on ~~All~~three ~~inter-company~~operating ~~transactions~~ and ~~balances~~reportable ~~have been eliminated~~segments. The ~~Unaudited~~financial ~~Consolidated Financial Statements presented herein include the accounts of our wholly owned subsidiaries. Certain~~ information ~~and~~contained ~~note~~in ~~disclosures~~this ~~normally~~report ~~included~~should inbe ~~financial~~read ~~statements prepared~~ in ~~accordance~~conjunction with ~~GAAP~~our ~~have~~Annual ~~been~~Report ~~condensed~~on orForm ~~omitted~~10-K ~~pursuant to applicable rules and regulations. The results of our operations~~ for the ~~nine~~fiscal ~~months~~year ended ~~March~~May 131, 2025, ~~are~~which ~~not~~was ~~necessarily~~filed ~~indicative~~with of the ~~results~~SEC ~~that~~on ~~may~~August ~~be expected for the fiscal year ending May 31~~4, 2025.

As described in Note 1, Description of the Company, the Company reports its financial performance based on four operating and reportable segments. The financial information contained in this report should be read in conjunction with our Annual Report on Form 10-K for the fiscal year ended June 1, 2024, which was filed with the SEC on August 5, 2024. 6

3. NEW ACCOUNTING PRONOUNCEMENTS - NOT YET ADOPTED

In December 2023, the Financial Accounting Standards Board ("'FASB") issued Accounting Standards Update ("ASU") 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, which expands the disclosures required in an entity's income tax rate reconciliation table and requires disclosure of income taxes paid in both U.S. and foreign jurisdictions. The amendments are effective for fiscal years beginning after December 15, 2024, with early adoption permitted, to be applied on a prospective basis, with retrospective application permitted. These requirements will impact our income tax disclosures and we are currently evaluating the impact of adoption.

In November 2024, the FASB issued ASU 2024-03, Income Statement (Topic 220): Reporting Comprehensive Income - Expense Disaggregation Disclosures, which requires an entity to disclose on an annual and interim basis, disaggregated information about specific income statement expense categories. The guidance should be applied prospectively with the option to apply the standard retrospectively. This ASU is effective for annual reporting periods beginning after December 15, 2026 and interim reporting periods beginning after December 15, 2027, with early adoption permitted. The Company is currently evaluating the potential impact of adopting this new guidance on its consolidated financial statements and disclosures.

4. SUMMARY OF ACCOUNTING POLICIES

Inventories, net: Our consolidated inventories were stated at the lower of cost and net realizable value, generally using a weighted-average cost method. Our net inventories include approximately $88.6 million of finished goods, $11.8 million of raw materials and $4.2 million of work-in-progress as of August 30, 2025, as compared to approximately $86.4 million of finished goods, $11.5 million of raw materials and $4.9 million of work-in-progress as of May 31, 2025.

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. If future demand changes in the industry or market conditions differ from management’s estimates, additional provisions may be necessary. Inventory reserves were approximately $7.7 million as of August 30, 2025 and $7.6 million as of May 31, 2025.

Intangible Assets: Our intangible assets represent the fair value for customer relationships and technology acquired in connection with prior acquisitions. Intangible assets subject to amortization were as follows (in thousands):


	August 30, 2025		May 31, 2025
Gross Amounts:
Customer Relationships (1)	$	912	$	911
Technology		150		150
Total Gross Amounts	$	1,062	$	1,061

Accumulated Amortization:
Customer Relationships	$	662	$	652
Technology		70		64
Total Accumulated Amortization	$	732	$	716

Intangible Assets, Net	$	330	$	345

(1) Change from prior per period reflects the impact of foreign currency translation.

The amortization expense associated with intangible assets subject to amortization for the next five years is presented in the following table (in thousands):


Fiscal Year	Amortization Expense
Remaining 2026	$	45
2027		60
2028		59
2029		59
2030		37
Thereafter		70
Total amortization expense	$	330

The weighted average number of years of amortization expense remaining is 6.6 years.

~~3. RECLASSIFICATIONS~~Accrued Liabilities: Accrued liabilities consisted of the following (in thousands):

Certain prior period amounts have been reclassified to conform to the current period reporting classifications. The reclassification was related to the unrealized foreign exchange gain (loss) on the Consolidated Statements of Cash Flows.


	August 30, 2025		May 31, 2025
Compensation and payroll taxes	$	4,182	$	4,303
Accrued severance		556		593
Professional fees		689		522
Contract liabilities		4,722		4,545
Other accrued expenses		4,211		4,313
Accrued Liabilities	$	14,360	$	14,276

4Warranties: We offer assurance-type warranties for specific products we manufacture. ~~NEW~~ ~~ACCOUNTING~~We ~~PRONOUNCEMENTS~~estimate the cost to perform under the warranty obligation and recognize this estimated cost at the time of the related product sale. We record expenses related to our warranty obligations as cost of sales in our Consolidated Statements of Comprehensive Income. Each quarter, we assess the actual warranty costs incurred on a product-by-product ~~NOT~~basis ~~YET~~and ~~ADOPTED~~compare the warranty costs to our estimated warranty obligation. With respect to new products, estimates are based generally on knowledge of the products and warranty experience.

InWarranty ~~November~~reserves ~~2023,~~are ~~Financial~~established ~~Accounting~~for ~~Standards~~costs Board ("FASB") issued Accounting Standards Update ("ASU") ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures. The amendment requires disclosures of significant segment expenses that are ~~regularly~~expected ~~provided~~ to ~~the~~be ~~chief~~incurred ~~operating~~after ~~decision~~the ~~maker~~sale ~~("CODM")~~ and ~~included~~delivery ~~within each reported measure~~ of ~~segment~~products ~~profit~~under ofwarranty. ~~loss,~~Warranty anreserves ~~amount~~are ~~and~~included ~~description~~in ofaccrued ~~its~~liabilities ~~composition~~on ~~for~~our ~~other~~Consolidated ~~segment~~Balance ~~items, and interim disclosures of a reportable segment's profit or loss and assets~~Sheets. The ~~new~~warranty ~~guidance~~reserves ~~also~~are ~~requires~~determined ~~that~~based aon ~~public~~known ~~entity~~product ~~that~~failures, ~~has~~historical aexperience ~~single reportable segment provide all the disclosures required by the amendments in this update~~ and ~~all~~other ~~existing~~available ~~segment disclosures~~evidence. ~~The~~Warranty ~~amendments~~reserves ~~are~~were ~~effective~~approximately ~~for~~$0.9 ~~fiscal~~million ~~years~~as ~~beginning~~of ~~after~~August ~~December 15~~30, ~~2023,~~2025 and ~~for~~approximately ~~interim~~$0.8 ~~periods~~million ~~within~~as ~~fiscal~~of ~~years~~May ~~beginning after December 15~~31, ~~2024, with early adoption permitted~~2025. ~~Upon adoption, this guidance should be applied retrospectively to all prior periods presented. The Company is currently evaluating this ASU to determine its impact on the Company's disclosures.~~

InCommon ~~December~~and ~~2023,~~Class ~~the~~B ~~FASB~~Common ~~issued~~Stock: ~~ASU~~We ~~2023-09~~have authorized 17,000,000 ~~Income~~shares ~~Taxes~~of ~~(Topic~~common ~~740):~~stock ~~Improvements~~and to3,000,000 ~~Income~~shares ~~Tax~~of ~~Disclosures,~~Class ~~which~~B ~~expands~~common ~~the~~stock. ~~disclosures~~The ~~required~~Class inB ancommon ~~entity's~~stock ~~income~~has ~~tax~~10 ~~rate~~votes ~~reconciliation~~per ~~table~~share and ~~requires~~has ~~disclosure~~transferability ofrestrictions; ~~income~~however, ~~taxes~~Class ~~paid~~B incommon ~~both~~stock ~~U.S.~~may ~~and~~be ~~foreign~~converted ~~jurisdictions.~~into ~~The~~common ~~amendments~~stock ~~are~~on ~~effective~~a share-for-share ~~fiscal~~basis ~~years~~at ~~beginning~~any ~~after~~time. ~~December~~With ~~15,~~respect ~~2024~~to dividends and distributions, ~~with~~shares ~~early~~of ~~adoption~~common ~~permitted,~~stock toand beClass ~~applied~~B oncommon astock ~~prospective~~rank ~~basis,~~equally ~~with~~and ~~retrospective~~have ~~application~~the ~~permitted.~~same ~~The~~rights, ~~Company~~except isthat ~~currently~~Class ~~evaluating~~B ~~this~~common ~~ASU~~stock tocash ~~determine~~dividends ~~its~~are ~~impact~~limited onto 90% of the ~~Company's~~amount ~~disclosures~~of Class A common stock cash dividends.

InRevenue ~~November 2024, the FASB issued ASU 2024-03 Income Statement (Topic 220)~~Recognition: ~~Reporting~~We ~~Comprehensive~~sell ~~Income~~our -products ~~Expense Disaggregation Disclosures, which requires an entity~~ to ~~disclose~~customers onin andiversified ~~annual~~industries and ~~interim~~perform ~~basis,~~periodic ~~disaggregated~~credit ~~information~~evaluations ~~about~~of ~~specific~~our ~~income~~customers’ ~~statement~~financial ~~expense categories~~condition. ~~The~~Terms ~~guidance~~are ~~should~~generally beopen ~~applied~~account, ~~prospectively~~payable ~~with~~net ~~the~~30 ~~option~~days toin ~~apply~~North ~~the~~America, ~~standard~~and ~~retrospectively.~~vary ~~The~~throughout ~~standard becomes effective for the annual period starting on January 1~~Asia/Pacific, ~~2027~~Europe and ~~interim~~Latin ~~periods~~America. ~~starting~~Estimates onof ~~January~~credit 1,losses ~~2028.~~are ~~The~~recorded ~~Company is~~ in the ~~process~~financial ofstatements ~~analyzing~~based ~~the~~on ~~impact~~monthly ~~that~~reviews ~~the adoption~~ of ~~ASU~~outstanding ~~2024-03 will have on its disclosures~~accounts.

5Our customers are generally not resellers, but rather businesses that incorporate our products into their processes from which they generate an economic benefit. ~~SUMMARY~~ OFThe ~~ACCOUNTING~~goods ~~POLICIES~~are also distinct in that each item sold to the customer is clearly identified on both the purchase order and resulting invoice. Each product we sell benefits the customer independently of the other products. Each item on each purchase order from the customer can be used by the customer unrelated to any other products we provide to the customer. We derive revenue from the sale of products. Generally, the performance obligation under contracts are satisfied when there is a transfer of control of the products to our customer, which is primarily upon shipment or, in certain instances, upon the delivery of the products to the named customer location.

~~Inventories,~~We ~~net:~~also ~~Our~~generate ~~consolidated~~revenue ~~inventories~~from ~~were~~repair, ~~stated~~installation ator ~~the~~training ~~lower~~activities. ofThe ~~cost~~services ~~and~~we ~~net~~provide ~~realizable~~are ~~value,~~relatively ~~generally~~short ~~using~~in aduration ~~weighted-average~~and ~~cost~~are ~~method.~~typically ~~Our~~completed ~~net~~in ~~inventories~~one ~~include~~or ~~approximately~~two ~~$82~~weeks.1 ~~million~~Therefore, ofat ~~finished~~each ~~goods~~reporting date, ~~$11.7~~the ~~million~~amount of ~~raw~~unbilled ~~materials~~work ~~and~~is $4insignificant.6 ~~million~~The ofservices ~~work-in-progress~~revenue ashas ofconsistently ~~March~~accounted 1,for ~~2025,~~less asthan ~~compared~~5% ~~to approximately $93.9 million~~ of ~~finished~~the ~~goods,~~Company’s ~~$12.2~~total ~~million~~revenues ~~of raw materials~~ and ~~$4.0~~is ~~million~~expected ofto ~~work-in-progress~~continue asat ofthat ~~June 1, 2024~~level.

~~Provisions~~We ~~for~~record ~~obsolete~~discounts ortaken ~~slow-moving~~based ~~inventories~~on ~~are~~historical ~~recorded~~experience. The policy varies by business unit. The Company allows returns with prior written authorization. We estimate returns based ~~upon~~on ~~regular~~historical ~~analysis~~experience. ofThe ~~stock~~Company ~~rotation~~maintains ~~privileges,~~a ~~obsolescence,~~reserve ~~the~~for ~~exiting~~returns ofbased ~~certain~~on ~~markets~~historical ~~and~~trends ~~assumptions~~that ~~about~~cover ~~future~~all ~~demand~~contracts and ~~market~~revenue ~~conditions~~streams using the expected value method because we have a large number of contracts with similar characteristics, which is considered variable consideration. ~~Inventory~~The ~~reserves~~reserve ~~were~~for ~~approximately~~returns $6creates a refund liability on our balance sheet as a contra trade accounts receivable as well as an asset in inventory.0 ~~million~~We value the inventory at cost due to there being minimal or no costs to the Company as ofwe ~~March~~generally 1,require ~~2025~~the customer to pay freight and ~~$6.0~~we ~~million~~typically do not have costs associated with activities such as ofrelabeling ~~June~~or 1repackaging. The reserve is considered immaterial at each balance sheet date. Returns for defective product are typically covered by our suppliers’ warranty, ~~2024~~thus, returns for defective product are not factored into our reserve.

~~Revenue~~Principal ~~Recognition:~~versus ~~Our~~agent ~~customers~~guidance ~~are~~was ~~generally~~considered ~~not~~for ~~resellers,~~products ~~but~~that ~~rather~~are ~~businesses~~provided ~~that~~by ~~incorporate~~ our ~~products~~suppliers ~~into~~versus ~~their~~manufactured ~~processes,~~by ~~from~~the ~~which they generate an economic benefit~~Company. The ~~goods~~Company ~~are~~acts ~~also~~as ~~distinct in that each item sold to~~ the ~~customer~~principal isas ~~clearly identified on both the purchase order and resulting invoice. Each product~~ we ~~sell~~are ~~benefits~~responsible ~~the~~for ~~customer~~satisfying ~~independently of~~ the ~~other~~performance ~~products~~obligation. ~~Each~~We ~~item~~have onprimary ~~each~~responsibility ~~purchase~~for ~~order~~fulfilling ~~from~~ the ~~customer~~contract, ~~can~~we behave ~~used~~inventory byrisk ~~the~~prior ~~customer~~to ~~unrelated~~delivery to ~~any~~our ~~other~~customer, ~~products~~ we ~~provide~~establish toprices, ~~the~~our ~~customer.~~consideration ~~Revenue~~ is ~~recognized~~not ~~when~~in ~~control~~the ~~transfers~~form ~~since~~of ita iscommission ~~not~~and ~~always~~we ~~based~~bear ~~on delivery of~~ the ~~goods~~credit risk. The Company’s recognizes revenue ~~includes~~in the ~~following~~gross ~~streams:~~amount of consideration.

Manufacturing/assembly

Distribution

Services revenue

Manufacturing/assembly typically includes the products that are manufactured or assembled in our manufacturing facility. These products can either be built to the customer’s prints/designs or are products that we stock in our warehouse to sell to any customer that places an order. The manufacturing business does not include a separate service bundled with the product sold or sold in addition to the product. Our contracts for customized products generally include termination provisions if a customer cancels their order. However, we recognize revenue at a point in time because the termination provisions normally do not require, upon cancellation, the customer to pay fees that are commensurate with the work performed. Each purchase order explicitly states the goods or services that we promise to transfer to the customer. The promises to the customer are limited only to those goods or services. The performance obligation is our promise to deliver both goods that were produced by the Company and resale of goods that we purchase from our suppliers. Our shipping and handling activities for destination shipments are performed prior to the customer obtaining control. As such,

~~they~~Contracts ~~are~~with ~~not~~customers: A revenue contract exists once a ~~separate~~customer ~~promised~~purchase order is received, reviewed and accepted. Each accepted purchase order identifies a distinct good or service as a performance obligation. The ~~Company~~goods ~~elects~~include standard products purchased from a supplier and stocked on our shelves, customized products purchased from a supplier, products that are customized or have value added to ~~account~~them ~~for~~in house prior to shipping to the customer and ~~handling~~manufactured asproducts. ~~activities~~Prior to ~~fulfill~~accepting a customer purchase order, we review the ~~promise~~credit worthiness of the customer. Purchase orders are deemed to ~~transfer~~meet the ~~goods~~collectability criterion once the customer’s credit is approved. The ~~goods~~Company wereceives ~~provide~~advance topayments or deposits from our customers ~~are~~before ~~distinct~~revenue inis ~~that~~recognized ~~our~~resulting ~~customers~~in ~~benefit~~contract ~~from~~liabilities. ~~the~~Contract ~~goods~~liabilities weare ~~sell~~included ~~them~~in ~~through~~accrued ~~use~~liabilities in ~~their~~the ~~own~~Consolidated ~~processes.~~Balance Sheets.

~~Distribution~~On ~~typically includes products purchased from our suppliers~~occasion, ~~stocked~~the inCompany ~~our~~enters ~~warehouses~~ bill-and-hold ~~then sold to our customers~~arrangements. ~~The~~Each ~~distribution~~bill-and-hold ~~business~~arrangement ~~does~~is ~~not~~reviewed ~~include~~and arevenue ~~separate~~is ~~service~~recognized ~~bundled~~only ~~with~~when the ~~product~~control ~~sold~~has ortransferred ~~sold~~to onour ~~top~~customer ofand ~~the~~certain ~~product.~~criteria ~~Revenue~~have isbeen ~~recognized~~met: ~~when~~(i) ~~control~~the ofreason for the ~~promised~~bill-and-hold ~~goods~~arrangement is ~~transferred~~substantive; to(ii) ~~our~~the ~~customers,~~product ~~which~~ is ~~simultaneous~~segregated ~~with~~from the ~~title~~Company’s ~~transferring~~other toinventory ~~the~~items ~~customer,~~held infor ansale; ~~amount~~(iii) ~~that reflects~~ the ~~transaction~~product ~~price~~is ~~consideration~~ready ~~that we expect to receive in exchange~~ for ~~those~~shipment ~~goods. Control refers~~ to the ~~ability of the~~ customer; toand ~~direct~~(iv) the ~~use~~Company ofdoes ~~and~~not ~~obtain~~have ~~substantially all~~ the ~~remaining~~ability ~~benefits~~to ~~from~~use the ~~goods.~~product ~~Our~~or ~~transaction~~direct ~~price~~it ~~consideration~~to isanother ~~fixed, unless otherwise disclosed below as variable consideration~~customer. ~~Generally,~~The ~~our~~bill ~~contracts~~and ~~require~~hold ~~our~~revenue ~~customers~~recognized towas ~~pay for goods after we deliver products to them~~$1.1 ~~Terms~~million ~~are~~for ~~generally~~the ~~open~~first ~~account,~~quarter ~~payable~~of ~~net~~fiscal 302026 ~~days in North America,~~ and ~~vary~~$3.1 ~~throughout~~million ~~Asia/Pacific,~~for ~~Europe~~the ~~and~~first ~~Latin~~quarter ~~America~~of ~~subject~~fiscal ~~to customary credit checks~~2025.

Repair, installation or training activities generate services revenue. The services we provide are relatively short in duration and are typically completed in one or two weeks. Therefore, at each reporting date, the amount of unbilled work is insignificant. The services revenue accounts for less than 5% of the Company’s total revenues and is expected to continue at that level.

Contracts with customers: A revenue contract exists once a customer purchase order is received, reviewed and accepted. Each accepted purchase order identifies a distinct good or service as the Company's performance obligation. The goods include standard products purchased from a supplier and stocked on our shelves, customized products purchased from a supplier, products that are customized or have value added to them in house prior to shipping to the customer and manufactured products. Prior to accepting a customer purchase order, we review the credit worthiness of the customer. Purchase orders are deemed to meet the collectability criterion once the customer’s credit is approved. The Company receives advance payments or deposits from our customers before revenue is recognized resulting in contract liabilities. Contract liabilities are included in accrued liabilities in the Unaudited Consolidated Balance Sheets.

On occasion, the Company enters into bill-and-hold arrangements. Each bill-and-hold arrangement is reviewed and revenue is recognized only when certain criteria have been met: (i) the reason for the bill-and-hold arrangement is substantive; (ii) the product is segregated from the Company’s other inventory items held for sale; (iii) the product is ready for shipment to the customer; and (iv) the Company does not have the ability to use the product or direct it to another customer.

We sell our products to customers in diversified industries and perform periodic credit evaluations of our customers’ financial condition. Payment 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.

Contract Balances: Contract balances were as follows (in thousands):

March 1, 2025

June 1, 2024

May 27, 2023

August 30, 2025

May 31, 2025

June 1, 2024

Accounts receivable

2427,~~932~~039

24,~~845~~117

3024,~~067~~845

Contract liabilities

4,~~545~~722

4,~~520~~545

34,~~283~~520

During the three ~~and nine~~ months ended ~~March~~August 130, 2025, the Company recognized $21.36 million ~~and $4.4 million, respectively,~~ of revenue upon satisfaction of the performance obligations related to the amounts ~~that were~~ included in the contract liabilities balance as of ~~June~~May 131, ~~2024~~2025. During the three months ended ~~March~~August 231, 2024, the Company ~~did not recognize revenue upon satisfaction of performance obligations and during the nine months ended March 2, 2024 the Company~~ recognized $20.9 million of revenue upon satisfaction of the performance obligations related to the amounts ~~that were~~ included in the contract liabilities balance as of ~~May~~June ~~27, 2023. At March~~ 1, ~~2025, the contract liability balance of $4~~2024.5 ~~million includes $1.2 million of deferred revenue from the disposal of Healthcare assets, which will be recognized over the next 12 to 18 months.~~

Refer to Note 119, Segment ~~and Geographic~~ Information for a disaggregation of revenue by reportable segment ~~and geographic region,~~ which represents how our ~~chief~~CODM ~~operating decision maker~~ reviews information internally to evaluate our financial performance and to make resource allocation and other decisions for the Company.

Loss Contingencies: We accrue a liability for loss contingencies when it is probable that a liability has been incurred and the amount can be reasonably estimated. When only a range of possible loss can be established, the most probable amount in the range is accrued. If no amount within this range is a better estimate than any other amount within the range, the minimum amount in the range is accrued. If we determine that there is at least a reasonable possibility that a loss may have been incurred, we will include a disclosure describing the contingency.

~~Intangible Assets: Intangible assets are initially recorded at their fair market values determined by quoted market prices in active markets, if available, or by recognized valuation models~~5. REVOLVING ~~Intangible~~CREDIT ~~assets~~FACILITY that have finite useful lives are amortized over their useful lives either on a straight-line basis or over their projected future cash flows and are tested for impairment when events or changes in circumstances occur that indicate possible impairment. Our intangible assets represent the fair value for customer relationships agreements acquired in connection with prior acquisitions. Technology represents the fair value acquired in connection with acquisitions and an exclusive license, manufacturing and distribution agreement. Intangible assets subject to amortization were as follows (in thousands):

	March 1, 2025		June 1, 2024
Gross Amounts:
Customer Relationships	$	893	$	3,396
Technology		150		380
Total Gross Amounts	$	1,043	$	3,776
Accumulated Amortization:
Customer Relationships	$	626	$	1,886
Technology		59		249
Total Accumulated Amortization	$	685	$	2,135
Net Intangible Assets	$	358	$	1,641

The Company entered into a Credit Agreement (as amended by the First Amendment to the Credit Agreement dated April 9, 2025, the "Credit Agreement") for a three-year Revolving Credit Facility with PNC Bank N.A. on March 20, 2023 (the "Revolving Credit Facility"). The Revolving Credit Facility will mature on March 20, 2026.

AsThe ~~described~~combined inmaximum ~~Note~~borrowings ~~10,~~under ~~Disposal~~the Revolving Credit Facility are $30 million. Proceeds of ~~Healthcare~~borrowings ~~Assets~~may be used for working capital and ~~Related~~general ~~Charges,~~corporate purposes. There were no drawings or repayments under the ~~Company~~Revolving ~~sold~~Credit ~~certain~~Facility ~~assets~~during ~~related~~fiscal to2026. ~~Healthcare~~There ~~including~~was ~~intangible~~no ~~assets~~amount ~~with~~outstanding aunder ~~book~~the ~~value~~Revolving Credit Facility as of ~~$1.1~~August ~~million~~30, 2025.

~~The~~On ~~amortization~~October ~~expense~~7, ~~associated~~2025, ~~with~~the ~~intangible~~Company ~~assets~~executed ~~subject~~a three-year extension to ~~amortization~~the ~~for~~Credit Agreement through the ~~next~~Second ~~five~~Amendment ~~years~~to isthe ~~presented~~Credit inAgreement with a maximum borrowing limit of $20 million. The terms of the ~~following~~new ~~table~~agreement ~~(in~~are ~~thousands):~~similar to the previous Credit Agreement.

Fiscal Year	AmortizationExpense
Remaining 2025	$	15
2026		59
2027		60
2028		60
2029		58
Thereafter		106
Total amortization	$	358

The Credit Agreement provides that the Company must maintain compliance with a maximum consolidated leverage ratio covenant and a minimum consolidated fixed charge coverage ratio, each as determined in accordance with the Credit Agreement. The Credit Agreement also contains affirmative, negative and financial covenants customary for financings of this type, including, among other things, limitations on certain other indebtedness, loans and investments, liens, mergers, asset sales, and transactions with affiliates, as well as customary events of default for financings of this type. The Company was in compliance with financial covenants under the Credit Agreement as of August 30, 2025.

~~The~~Borrowings ~~weighted~~under ~~average~~the ~~number~~Revolving Credit Facility will bear interest at a rate per annum selected by the Company from the following options: (a) Term secured overnight financing rate ("SOFR") for the applicable Interest Period, plus the SOFR Adjustment for the applicable Interest Period, plus 1.25%; (b) Base Rate plus 0.25% or (c) Daily Simple risk free rate ("RFR") for Euros, plus the RFR Adjustment, plus 1.25%. Letters of ~~years~~credit issued under the letter of ~~amortization~~credit ~~expense~~sub-facility ~~remaining~~will have a letter of credit fee equal to 1.25% per annum. The fee for the unused portion of the credit line is 70.110%. ~~years~~There were no letters of credit outstanding as of August 30, 2025.

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. We regularly review our deferred tax assets for recoverability and determine the need for a valuation allowance based on a number of factors, including both positive and negative evidence. These factors include historical taxable income or loss, projected future taxable income or loss, the expected timing of the reversals of existing temporary differences and the implementation of tax planning strategies. In circumstances where we, or any of our affiliates, have incurred three years of cumulative losses which constitute significant negative evidence, positive evidence of equal or greater significance is needed to overcome the negative evidence before a tax benefit is recognized for deductible temporary differences and loss carryforwards.

Accrued Liabilities: Accrued liabilities consisted of the following (in thousands):

	March 1, 2025		June 1, 2024
Compensation and payroll taxes	$	3,638	$	3,495
Accrued severance		557		506
Professional fees		628		487
Contract liabilities		4,545		4,520
Other accrued expenses		1,900		6,396
Accrued Liabilities	$	11,268	$	15,404

~~Warranties: We offer assurance type warranties for the limited number of specific products we manufacture~~6. LEASE WeOBLIGATIONS estimate the cost to perform under the warranty obligation and recognize this estimated cost at the time of the related product sale. We record expense related to our warranty obligations as cost of sales in our Unaudited Consolidated Statements of Comprehensive (Loss) Income. Each quarter, we assess actual warranty costs incurred on a product-by-product basis and compare the warranty costs to our estimated warranty obligation. With respect to new products, estimates are based generally on knowledge of the products and warranty experience.

~~Warranty~~The ~~reserves~~Company ~~are~~leases ~~established~~real ~~for~~and ~~costs~~personal ~~that~~property ~~are~~in ~~expected~~the tonormal becourse ~~incurred~~of ~~after~~business ~~the~~under ~~sale~~various ~~and~~operating ~~delivery~~leases. ofThe ~~products~~Company ~~under~~uses ~~warranty~~operating leases for facility space and automobiles. ~~Warranty~~Most ~~reserves~~of ~~are~~the ~~included~~leased infacility ~~accrued~~space ~~liabilities~~is onfor ~~our~~sales ~~Unaudited~~and ~~Consolidated~~general ~~Balance~~office ~~Sheets~~use. ~~The~~Automobile ~~warranty~~leases ~~reserves~~ are ~~determined~~used ~~based~~throughout onthe ~~known~~Company. ~~product~~Several ~~failures,~~leases ~~historical~~include ~~experience~~renewal ~~and~~clauses ~~other~~which ~~available~~vary ~~evidence.~~in ~~Warranty~~length ~~reserves~~and ~~were~~may ~~approximately~~not $0include specific rent renewal amounts.8 ~~million~~The asCompany will revise the value of ~~March~~the 1,right ~~2025~~of ~~and~~use ~~approximately~~assets ~~$0.7~~and ~~million~~associated aslease ofliabilities ~~June~~upon 1,a ~~2024~~remeasurement event.

~~6. REVOLVING~~The ~~CREDIT~~gross ~~FACILITY~~amounts of assets and liabilities related to operating leases on August 30, 2025 and May 31, 2025 were as follows (in thousands):

The Company entered into a Credit Agreement (as amended by the First Amendment to the Credit Agreement dated April 9, 2025 the "Credit Agreement") for a three-year Revolving Credit Facility with PNC Bank N.A. on March 20, 2023 (the "Revolving Credit Facility"). The Revolving Credit Facility will mature on March 20, 2026.


Lease Type	August 30, 2025		May 31, 2025
Right of use lease assets	$	2,026	$	2,276

Lease liabilities current		1,167		1,171

Lease liabilities non-current		859		1,105

The First Amendment to the Credit Agreement modified the definition of “Consolidated EBITDA” to take into account the non-recurring non-cash loss in the amount of $4,920,000 recognized by the Company in connection with the Asset Purchase Agreement, dated January 24, 2025, between the Company and DirectMed Imaging, LLC.

Borrowings under the Revolving Credit Facility, including the swingline loan and letter of credit sub-facility extended to the Company thereunder, are secured by (i) a continuing first priority lien on and security interest in and to substantially all of the assets of the Company and its domestic subsidiaries and (ii) a continuing first priority pledge of the Pledged Collateral of the Company and the Guarantors identified in the Security Agreement and the Pledge Agreement executed in connection with the Revolving Credit Facility. The combined maximum borrowings under the Revolving Credit Facility are $30 million. Proceeds of borrowings may be used for working capital and general corporate purposes. The Company utilized $1.0 million of the credit line and repaid that $1.0 million during the first quarter of fiscal 2025. There was no utilization of the credit line in the second or third quarter of fiscal 2025. As of March 1, 2025, no amount was outstanding under the Revolving Credit Facility.

Borrowings under the Revolving Credit Facility will bear interest at a rate per annum selected by the Company from the following options: (a) Term SOFR Rate (for the applicable Interest Period) plus the SOFR Adjustment (for the applicable Interest Period) plus 1.25%; (b) Base Rate plus 0.25% or (c) Daily Simple RFR (for Euros) plus the RFR Adjustment plus 1.25%. Letters of credit issued under the letter of credit sub-facility will have a letter of credit fee equal to 1.25% per annum. The fee for the unused portion of the credit line is 0.10%.

7. LEASE OBLIGATIONS

The Company leases real and personal property in the normal course of business under various operating leases. The Company uses operating leases for facility space and automobiles. Most of the leased facility space is for sales and general office use. Automobile leases are used throughout the Company.

Several leases include renewal clauses which vary in length and may not include specific rent renewal amounts. The Company will revise the value of the right of use assets and associated lease liabilities upon a remeasurement event.

The net assets and liabilities related to operating leases were as follows (in thousands):

Lease Type	March 1, 2025		June 1, 2024
Right of use lease assets	$	2,035	$	2,760
Lease liabilities current		986		1,169
Lease liabilities non-current		1,049		1,591

The components of lease costs were as follows (in thousands):

		Three Months Ended
		March 1, 2025		March 2, 2024
		August 30, 2025		August 31, 2024
Consolidated operating lease expense	Operating expenses	$	~~386~~399	$	~~457~~435

		Nine Months Ended
		March 1, 2025		March 2, 2024
Consolidated operating lease expense	Operating expenses	$	1,240	$	1,328

The approximate future minimum lease payments under operating leases at August 30, 2025 were as follows (in thousands):

The approximate future minimum lease payments under operating leases at March 1, 2025 were as follows (in thousands):


Fiscal Year	Operating Leases
Remaining 2026	$	947
2027		709
2028		310
2029		167
Total lease payments		2,133
Less imputed interest		107
Net minimum lease payments	$	2,026

Fiscal Year	Operating Leases
Remaining 2025	$	293
2026		1,015
2027		476
2028		228
2029		142
Total lease payments		2,154
Less imputed interest		119
Net minimum lease payments	$	2,035

The weighted average remaining lease terms and interest rates of leases held by the Company as of August 30, 2025 and August 31, 2024 were as follows:

The weighted average remaining lease terms and interest rates of leases held by the Company as of March 1, 2025 and March 2, 2024 were as follows:


Operating Lease as of:	Weighted Average Remaining Lease Term in Years	Weighted Average Interest Rate
August 30, 2025	2.2	5.3%
August 31, 2024	2.7	4.6%

Operating Lease as of:	Weighted Average RemainingLease Term in Years	Weighted Average Interest Rate
March 1, 2025	4.5	4.9%
March 2, 2024	2.8	4.4%

The cash activities associated with our leases for the three month periods ended August 30, 2025 and August 31, 2024 were as follows (in thousands):

The cash activities associated with our leases for the three month and nine month periods ended March 1, 2025 and March 2, 2024 were as follows (in thousands):


		Three Months Ended
Cash Flow Source	Classification	August 30, 2025		August 31, 2024

Operating cash flows from operating leases	Operating activities	$	333	$	353

		Three Months Ended
Cash Flow Source	Classification	March 1, 2025		March 2, 2024
Operating cash flows from operating leases	Operating activities	$	317	$	354
		Nine Months Ended
Cash Flow Source	Classification	March 1, 2025		March 2, 2024
Operating cash flows from operating leases	Operating activities	$	1,013	$	977

7. INCOME TAXES

We recorded an income tax provision of $0.4 million and $0.1 million for the first three months of fiscal 2026 and the first three months of fiscal 2025, respectively. The effective income tax rate during the first three months of fiscal 2026 was a tax provision of 18.1% as compared to a tax provision of 9.0% during the first three months of fiscal 2025. The difference in rate during the first three months of fiscal 2026 as compared to the first three months of fiscal 2025 reflects changes in our geographical distribution of income (loss). The 18.1% effective income tax rate differs from the federal statutory rate of 21% as a result of our geographical distribution of income (loss) and the utilization of the U.S. research and development credit.

In the normal course of business, we are subject to examination by taxing authorities throughout the world. Years prior to fiscal 2015 are closed for examination under the statute of limitation for U.S. federal, and U.S. state. In Netherlands, years prior to fiscal 2020 are closed for examination. We are under examination in Germany for fiscal years 2019 to 2022. During the third quarter of fiscal 2025, we received a notice from the State of Illinois for an income tax audit covering the period from June 2021 to May 2023. The Company has provided all the documentation requested and is waiting to hear from the State of Illinois office for further action. We have no other current open audits in the U.S.

We have historically determined that undistributed earnings of our foreign subsidiaries, to the extent of cash available, will be repatriated to the U.S. The deferred tax liability on the outside basis difference is now primarily withholding tax on future dividend distributions. There was no deferred tax liability related to undistributed earnings of our foreign subsidiaries as of August 30, 2025 and May 31, 2025.

The Company recorded a $0.3 million uncertain tax position as of August 30, 2025 as compared to $0.3 million as of May 31, 2025. We record interest related to uncertain tax positions in the income tax expense line item within the Consolidated Statements of Comprehensive Income. 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 August 30, 2025 and May 31, 2025.

The Company maintains a valuation allowance representing the portion of the deferred tax asset that management does not believe is more likely than not to be realized. The valuation allowance was $2.9 million as of August 30, 2025 and $2.8 million as of May 31, 2025. The valuation allowance relates to state NOLs ($1.7 million) and deferred tax assets in foreign jurisdictions where historical taxable losses have been incurred ($1.2 million). The amount of the deferred tax asset considered realizable, however, could be adjusted if estimates of future taxable income during the carryforward period are increased, or if objective negative evidence in the form of cumulative losses is no longer present and additional weight may be given to subjective evidence such as our projections for growth.

We have considered the impact of the One Big Beautiful Bill Act ("OBBBA") on the Company’s annual effective tax rate. The impact of OBBBA on the annual effective tax rate includes the reduction in the research and development credit from the Section 280c election. These changes did not have a significant impact to the annual effective tax rate. However, the enactment of the OBBBA introduced several significant tax law modifications that, while not affecting the annual effective tax rate, do have other implications for the Company. The OBBBA makes permanent key elements of the 2017 Tax Cuts and Jobs Act, including 100% bonus depreciation and domestic research cost expensing pursuant to IRC §174 for fiscal years beginning after December 31, 2024. The Company is currently evaluating the future impact of OBBA on its financial position and these changes are anticipated to have an impact on the results of operations and cash flows.

8. ~~INCOME~~EARNINGS ~~TAXES~~PER SHARE

WeOur ~~recorded~~Class anB ~~income~~common ~~tax~~stock ~~benefit~~is ofconsidered ~~$1.3~~a ~~million~~participating ~~and~~security anrequiring ~~income~~the ~~tax~~use ~~provision~~ of ~~$0.1~~the ~~million~~two-class method for the ~~first~~computation ~~nine months~~ of ~~fiscal~~basic ~~2025~~ and ~~for~~diluted ~~the~~earnings ~~first~~per ~~nine months of fiscal 2024, respectively~~share. The ~~effective~~two-class ~~income~~computation ~~tax~~method ~~rate~~for ~~during~~each ~~the~~period ~~first~~reflects ~~nine~~the ~~months~~cash ofdividends ~~fiscal~~paid ~~2025~~per ~~was~~share afor ~~tax~~each ~~benefit~~class of ~~36.5%~~stock, asplus ~~compared~~the toamount ~~a tax provision~~ of ~~39.2%~~allocated ~~during~~undistributed ~~the~~earnings ~~first~~per ~~nine~~share ~~months~~computed ofusing ~~fiscal~~the ~~2024.~~participation ~~The~~percentage ~~difference~~which inreflects ~~rate during~~ the ~~first~~dividend ~~nine~~rights ~~months~~ of ~~fiscal~~each ~~2025~~class asof ~~compared~~stock. toBasic ~~the~~and ~~first~~diluted ~~nine~~earnings ~~months~~per ofshare ~~fiscal~~were ~~2024~~computed ~~reflects~~using ~~changes~~the intwo-class ~~our~~method. ~~geographical~~The ~~distribution~~shares of ~~income~~Class ~~(loss)~~B ~~and~~common ~~the~~stock ~~discrete~~are ~~item~~considered ~~related~~ to ~~the~~be ~~sale~~participating ofconvertible ~~healthcare~~securities ~~assets~~since ~~resulting in a loss in~~ the ~~third~~shares ~~quarter~~ of ~~fiscal~~Class ~~2025.~~B ~~The~~common ~~36.5%~~stock ~~effective~~are ~~income~~convertible ~~tax~~on ~~rate~~a ~~differs~~share-for-share ~~from~~basis ~~the~~into ~~federal~~shares ~~statutory rate~~ of ~~21%~~common asstock aand ~~result~~may ofparticipate ~~our~~in ~~geographical~~dividends ~~distribution~~with ofcommon ~~income~~stock ~~(loss),~~according asto ~~well~~a aspredetermined ~~the~~formula ~~book~~which ~~loss~~is on90% ~~the sale~~ of ~~healthcare assets and~~ the ~~utilization~~amount of ~~the~~Class ~~U.S.~~A ~~research~~common ~~and~~stock ~~development~~cash ~~credit~~dividends.

InThe ~~the~~allocation ~~normal~~of ~~course~~undistributed ofearnings ~~business,~~(loss) webetween ~~are~~common ~~subject~~stock toand ~~examination~~Class byB ~~taxing~~common ~~authorities~~stock ~~throughout~~is ~~the~~based ~~world.~~on ~~Years~~the ~~prior~~relationship toof ~~fiscal~~the ~~2015~~weighted ~~are~~shares ~~closed~~outstanding for ~~examination under~~ the ~~statute~~respective ofstock ~~limitation~~class ~~for~~(common ~~U.S.~~or ~~federal,~~Class ~~and~~B) ~~U.S.~~to ~~state.~~the Intotal ~~Netherlands,~~of ~~years~~the ~~prior~~weighted toshares ~~fiscal~~outstanding ~~2020~~for ~~are~~common ~~closed~~stock ~~for~~and ~~examination.~~90% Weof ~~are~~the ~~under~~weighted ~~examination~~shares inoutstanding ~~Germany~~ for ~~fiscal~~Class ~~years~~B ~~2019~~common ~~to 2022~~stock. ~~During~~The ~~the~~adjustment ~~third~~to ~~quarter~~the number of ~~fiscal~~outstanding ~~2025,~~Class weB ~~received~~common astock ~~notice~~shares ~~from~~reflects the ~~State~~limitation of ~~Illinois~~Class ~~for~~B ancommon ~~income~~stock ~~tax~~dividends ~~audit covering the period from June 2021~~ to ~~May~~90% ~~2023.~~of Wecommon ~~have~~stock ~~no other current open audits in the U~~dividends.S.

WeThe ~~have~~earnings ~~historically~~per ~~determined~~share ~~that~~(“EPS”) ~~certain~~presented ~~undistributed~~in ~~earnings of~~ our ~~foreign~~Unaudited ~~subsidiaries,~~Consolidated toStatements ~~the extent~~ of ~~cash~~Comprehensive ~~available,~~Income ~~will~~for ~~be repatriated to~~ the ~~U.S.~~first ~~The~~quarter ~~deferred~~of ~~tax~~fiscal ~~liability~~2026 onand ~~the~~2025 ~~outside~~was ~~basis~~based ~~difference is now primarily withholding tax~~ on ~~future~~the ~~dividend~~following ~~distributions.~~amounts ~~The~~(in ~~deferred tax liability related to undistributed earnings of our foreign subsidiaries was less than $0.1 million as of March 1~~thousands, ~~2025~~except ~~and~~per ~~June~~share ~~1, 2024.~~amounts):

The Company recorded $0.3 million for uncertain tax positions as of March 1, 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 Unaudited Consolidated Statements of Comprehensive (Loss) Income. 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 and penalties as it relates to the reserve of the research and development credit as of March 1, 2025 and June 1, 2024, respectively.


	Three Months Ended
	August 30, 2025				August 31, 2024
	Basic		Diluted		Basic			Diluted
Numerator for Basic and Diluted EPS:
Net income	$	1,909	$	1,909	$	590		$	590
Less dividends:
Common stock		746		746		739			739
Class B common stock		111		111		111			111
Undistributed earnings (loss)	$	1,052	$	1,052	$	(260	)	$	(260	)

Common stock undistributed earnings (loss)	$	916	$	917	$	(226	)	$	(226	)
Class B common stock undistributed earnings (loss)		136		135		(34	)		(34	)
Total undistributed earnings (loss)	$	1,052	$	1,052	$	(260	)	$	(260	)

Denominator for Basic and Diluted EPS:
Common stock weighted average shares		12,393		12,393		12,200			12,200
Effect of dilutive securities
Dilutive stock options				151					231
Denominator for diluted EPS adjusted for weighted average shares and assumed conversion				12,544					12,431
Class B common stock weighted average shares and shares under if-converted method for diluted EPS		2,049		2,049		2,049			2,049

Net income per share:
Common stock	$	0.13	$	0.13	$	0.04		$	0.04

Class B common stock	$	0.12	$	0.12	$	0.04		$	0.04

~~The~~Note: ~~Company~~There ~~maintains~~were ano ~~valuation~~common ~~allowance~~stock ~~representing~~options ~~the portion of the deferred tax asset~~ that ~~management~~were ~~does~~antidilutive ~~not~~and ~~believe is more likely than~~ not toincluded ~~be realized. The valuation allowance was $2.2 million as of March 1, 2025 and June 1, 2024. The current valuation allowance is recorded on deferred tax assets~~ in ~~foreign jurisdictions where historical taxable losses have been incurred ($1.1 million) and state NOLs ($1.1 million). The amount of~~ the ~~deferred~~diluted ~~tax~~earnings ~~asset~~per ~~considered~~share ~~realizable,~~for ~~however, could be adjusted if estimates of future taxable income during~~ the ~~carryforward~~first ~~period~~quarter ~~are increased, or if objective negative evidence in the form~~ of ~~cumulative~~fiscal ~~losses~~2026 ~~is no longer present~~ and ~~additional~~fiscal ~~weight may be given to subjective evidence such as our projections for growth~~2025.

9. EARNINGS PER SHARE

We have authorized 17,000,000 shares of common stock and 3,000,000 shares of Class B common stock. The Class B common stock has 10 votes per share and has transferability restrictions; however, Class B common stock may be converted into common stock on a share-for-share basis at any time. With respect to dividends and distributions, shares of common stock and Class B common stock rank equally and have the same rights, except that Class B common stock cash dividends are limited to 90% of the amount of common stock cash dividends.

Our Class B common stock is considered a participating security requiring the use of the two-class method for the computation of basic and diluted earnings per share. The two-class computation method for each period reflects the cash dividends paid per share for each class of stock, plus the amount of allocated undistributed (loss) earnings per share computed using the participation percentage which reflects the dividend rights of each class of stock. Basic and diluted earnings per share were computed using the two-class method. The shares of Class B common stock are considered to be participating convertible securities since the shares of Class B common stock are convertible on a share-for-share basis into shares of common stock and may participate in dividends with common stock according to a predetermined formula which is 90% of the amount of common stock cash dividends.

The allocation of undistributed (loss) earnings between common stock and Class B common stock is based on the relationship of the weighted shares outstanding for the respective stock class (common or Class B) to the total of the weighted shares outstanding for common stock and 90% of the weighted shares outstanding for Class B common stock. The adjustment to the number of outstanding Class B common stock shares reflects the limitation of Class B common stock dividends to 90% of common stock dividends.

~~The~~9. SEGMENT earnings per share (“EPS”) presented in our Unaudited Consolidated Statements of Comprehensive (Loss) Income for the third quarter of fiscal 2025 and 2024 was based on the following amounts (in thousands, except per share amounts):INFORMATION

	Three Months Ended
	March 1, 2025						March 2, 2024
	Basic			Diluted			Basic			Diluted
Numerator for Basic and Diluted EPS:
Net (loss) income	$	(2,057	)	$	(2,057	)	$	750		$	750
Less dividends:
Common stock		742			742			733			733
Class B common stock		110			110			111			111
Undistributed loss	$	(2,909	)	$	(2,909	)	$	(94	)	$	(94	)
Common stock undistributed loss	$	(2,531	)	$	(2,531	)	$	(82	)	$	(82	)
Class B common stock undistributed loss		(378	)		(378	)		(12	)		(12	)
Total undistributed loss	$	(2,909	)	$	(2,909	)	$	(94	)	$	(94	)
Denominator for Basic and Diluted EPS:
Common stock weighted average shares		12,333			12,333			12,227			12,227
Effect of dilutive securities
Dilutive stock options					—						218
Denominator for diluted EPS adjusted for weighted average shares and assumed conversion					12,333						12,445
Class B common stock weighted average shares and shares under if-converted method for diluted EPS		2,049			2,049			2,052			2,052
Net (loss) income per share:
Common stock	$	(0.15	)	$	(0.15	)	$	0.05		$	0.05
	$	-
Class B common stock	$	(0.13	)	$	(0.13	)	$	0.05		$	0.05

In June 2025, the Company reevaluated its operating segments to better align with how the CODM allocates resources and evaluates performance. The key factor in this evaluation was the sale of the majority of assets in the Healthcare segment to DirectMed and continued sale of CT tubes pursuant to an exclusive supply agreement. Accordingly, the Company decided to integrate PMT and Healthcare into one segment, thereby resulting in three reporting segments. The segment results for prior periods were retrospectively recast to reflect the new segment reporting structure.

~~Note:~~The ~~There~~Company ~~were~~reports ~~266~~its ~~common~~financial ~~stock~~performance ~~options~~to ~~that~~its ~~were~~CODM ~~antidilutive~~based ~~and~~on ~~not included in~~ the ~~diluted~~three ~~earnings~~operating ~~per share in the third quarter of fiscal 2025. There were no common stock options that were antidilutive~~ and ~~not~~reportable ~~included~~segments indefined ~~the~~as ~~diluted earnings per share for the third quarter of fiscal 2024.~~follows:

Power and Microwave Technologies ("PMT") includes the power grid and microwave tube business and RF, Wireless and Power technologies. PMT provides design-in support, systems integration, prototype design and manufacturing, testing, logistics and aftermarket technical service and repair. PMT also offers its customers technical services for both microwave and industrial equipment and includes CT tubes sold to DirectMed pursuant to a supply agreement.

Green Energy Solutions ("GES") designs and manufactures products for the energy storage market and power management applications. We provide design-in support, systems integration, prototype design and manufacturing, testing, logistics and aftermarket technical service and repair.

Canvys provides customized display solutions serving the corporate enterprise, financial, healthcare, industrial and medical original equipment manufacturers markets. Display solutions include touch screens, protective panels, custom enclosures, All-In-One computers, specialized cabinet finishes and application specific software packages and certification services.

The CODM for Richardson Electronics, Ltd. is Edward J. Richardson (Chairman, Chief Executive Officer and President). The CODM utilizes segment gross profit compared to both the current forecast and the prior year to analyze and assess financial performance by segment. The CODM’s assessment of each segment’s financial performance is utilized to deliberate and execute decisions to allocate resources to manage the growth and profitability of the individual segments and the entire Company. Inventories, net is the only segment asset metric analyzed and reviewed by the CODM.

The EPS presented in our Unaudited Consolidated Statements of Comprehensive (Loss) Income for the first nine months of fiscal 2025 and 2024 was based on the following amounts (in thousands, except per share amounts):

	Nine Months Ended
	March 1, 2025						March 2, 2024
	Basic			Diluted			Basic			Diluted
Numerator for Basic and Diluted EPS:
Net (loss) income	$	(2,218	)	$	(2,218	)	$	180		$	180
Less dividends:
Common stock		2,223			2,223			2,199			2,199
Class B common stock		332			332			333			333
Undistributed loss	$	(4,773	)	$	(4,773	)	$	(2,352	)	$	(2,352	)
Common stock undistributed loss	$	(4,150	)	$	(4,150	)	$	(2,043	)	$	(2,049	)
Class B common stock undistributed loss		(623	)		(623	)		(309	)		(303	)
Total undistributed loss	$	(4,773	)	$	(4,773	)	$	(2,352	)	$	(2,352	)
Denominator for Basic and Diluted EPS:
Common stock weighted average shares		12,283			12,283			12,208			12,208
Effect of dilutive securities
Dilutive stock options					—						272
Denominator for diluted EPS adjusted for weighted average shares and assumed conversion					12,283						12,480
Class B common stock weighted average shares and shares under if-converted method for diluted EPS		2,049			2,049			2,052			2,052
Net (loss) income per share:
Common stock	$	(0.16	)	$	(0.16	)	$	0.01		$	0.01
Class B common stock	$	(0.14	)	$	(0.14	)	$	0.01		$	0.01

Note: There were 249 common stock options that were antidilutive and not included in the diluted earnings per share for the first nine months of fiscal 2025. There were no common stock options that were antidilutive and not included in the diluted earnings per share for first nine months of fiscal 2024.

10. DISPOSAL OF HEALTHCARE ASSETS AND RELATED CHARGES

On January 24, 2025, the Company entered into an Asset Purchase Agreement (the “Purchase Agreement”) with DirectMed. Pursuant to the terms and subject to the conditions of the Purchase Agreement, DirectMed 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”). The IMES Sale transaction closed simultaneously with the execution of the Purchase Agreement on January 24, 2025.

Under the terms of the Purchase Agreement, the Company sold a substantial portion of the assets comprising its Healthcare reportable segment to DirectMed for an initial consideration of $8.2 million and entered into an exclusive 10-year global supply agreement in which Richardson will supply DirectMed with repaired Siemens CT X-ray tubes ("Siemens CT Supply Agreement"). Additionally, the Company will continue manufacturing ALTA CT X-ray tubes for DirectMed for approximately 12 to 18 months ("ALTA CT Supply Agreement").

Consideration received of $8.2 million from DirectMed was allocated between the asset sale and the ALTA CT Supply Agreement based on their respective fair values (measured using Level 3 inputs) as follows: $7.0 million allocated to the asset sale and $1.2 million allocated to the ALTA CT Supply Agreement. The consideration related to the ALTA CT Supply Agreement has been initially recorded as deferred revenue within Other Liabilities in the Consolidated Balance Sheets and will be recognized into income as ALTA tubes are sold. Deferred revenue as of March 1, 2025 was $1.2 million.

In conjunction with the IMES Sale, other non-cash charges were incurred relating to the write-down of CT tube component inventory not transferred to the buyer and not expected to be used by the Company of $1.4 million, and an impairment of specific property, plant and equipment of $0.5 million that will be used to satisfy the ALTA CT Supply Agreement, which are included in the total loss recorded for the three and nine month periods ended March 1, 2025.

A summary of the $4.9 million disposal loss and related charges is shown in the following table (in thousands):

Proceeds from IMES sale attributable to disposal of healthcare assets	$	6,985
Assets sold:
Accounts receivable		1,004
Inventories, net		7,123
Property, plant and equipment, net		264
Intangible assets, net		1,117
Transaction related costs		448
Loss on disposal of healthcare assets		(2,971	)
Other charges:
Loss on write-down of healthcare related inventory not disposed of		1,420
Impairment of property, plant and equipment, net to satisfy ALTA CT supply agreement		525
Total loss	$	(4,916	)

11. SEGMENT AND GEOGRAPHIC INFORMATION

As described in Note 1, Description of the Company, the Company reports its financial performance based on the operating and reportable segments which are 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. As a designer, manufacturer, technology partner and authorized distributor, PMT’s strategy is to provide specialized technical expertise and engineered solutions based on our core engineering and manufacturing capabilities on a global basis. We provide solutions and add value through design-in support, systems integration, prototype design and manufacturing, testing, logistics and aftermarket technical service and repair - all through our existing global infrastructure. PMT’s focus is on products for power, RF and microwave applications for customers in 5G, aviation, broadcast, communications, industrial, marine, medical, military, scientific and semiconductor markets. PMT focuses on various applications including broadcast transmission, CO2 laser cutting, diagnostic imaging, dielectric and induction heating, high energy transfer, high voltage switching, plasma, power conversion, radar and radiation oncology. PMT also offers its customers technical services for both microwave and industrial equipment.

Green Energy Solutions ("GES") combines our key technology partners and engineered solutions capabilities to design and manufacture innovative products for the fast-growing energy storage market and power management applications. As a designer, manufacturer, technology partner and authorized distributor, GES’s strategy is to provide specialized technical expertise and engineered solutions using our core design engineering and manufacturing capabilities on a global basis. We provide solutions and add value through design-in support, systems integration, prototype design and manufacturing, testing, logistics and aftermarket technical service and repair - all through our existing global infrastructure. GES’s focus is 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.

Canvys provides customized display solutions serving the corporate enterprise, financial, healthcare, industrial and medical original equipment manufacturers markets. Our engineers design, manufacture, source and support a full spectrum of solutions to match the needs of our customers. We offer long-term availability and proven custom display solutions that include touch screens, protective panels, custom enclosures, All-In-One computers, specialized cabinet finishes and application specific software packages and certification services. We partner with both private label manufacturing companies and leading branded hardware vendors to offer the highest quality display and touch solutions and customized computing platforms.

Healthcare manufactures, repairs, refurbishes and distributes high value replacement parts and equipment for the healthcare market including hospitals, medical centers, asset management companies, independent service organizations and multi-vendor service providers. Products include diagnostic imaging replacement parts for CT and MRI systems; replacement CT and MRI tubes; CT service training; MRI and RF amplifiers; hydrogen thyratrons, klystrons, magnetrons; flat panel detector upgrades; pre-owned CT systems; and additional replacement solutions currently under development for the diagnostic imaging service market. 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 assets to DirectMed, the Company only manufactures and repairs CT tubes and sells them to DirectMed under an exclusive supply agreement.

On January 24, 2025, the Company sold a substantial portion of its Healthcare assets to DirectMed and entered into an exclusive 10-year global supply agreement in which the Company will supply DirectMed with repaired Siemens CT X-ray tubes. Additionally, the Company will continue manufacturing ALTA CT X-ray tubes for DirectMed for approximately 12 to 18 months. Refer to Note 10, Disposal of Healthcare Assets and Related Charges, for additional detail.

The CEO, who is the chief operating decision maker, evaluates performance and allocates Company resources primarily based on the gross profit of each segment.

Operating results by segment are summarized in the following table (in thousands):

	Three Months Ended				Nine Months Ended
	Three Months Ended August 30, 2025
	March 1, 2025		March 2, 2024		March 1, 2025			March 2, 2024
	PMT		GES			Canvys			Total
PMT
Sales	$	39,069	$	7,263		$	8,275		$	54,607
Net Sales	$	33,216	$	31,163	$	101,815		$	98,199
Cost of sales		26,843		5,113			5,722			37,678
Gross Profit		10,243		8,815		30,875			29,231
Gross profit		12,226		2,150			2,553			16,929
GES
Selling, general and administrative expenses										15,961
Net Sales		9,299		11,531		23,359			18,534
Operating income										968
Gross Profit		3,049		3,070		7,337			5,411
Interest income										169
Canvys
Foreign exchange gain										289
Net Sales		9,195		6,590		23,684			23,770
Other, net										904
Gross Profit		3,056		2,265		7,848			8,070
Income before taxes									$	2,330
Healthcare
	Three Months Ended August 31, 2024
Net Sales		2,094		3,091		8,162			8,583
	PMT		GES			Canvys			Total
Gross Profit		325		1,286		2,365			2,530
Sales	$	38,001	$	8,086		$	7,638		$	53,725
Cost of sales		26,570		5,712			5,017			37,299
Gross profit		11,431		2,374			2,621			16,426
Selling, general and administrative expenses										16,112
Gain on disposal of property, plant and equipment										2
Operating income										316
Interest income										58
Foreign exchange gain										277
Other, net										(3	)
Income before taxes									$	648

~~Geographic~~The ~~net~~segment ~~sales~~assets, ~~information~~which isconsists ~~primarily~~of ~~grouped~~inventories, bynet ~~customer~~are ~~destination~~summarized ~~into~~in ~~five~~the ~~areas:~~following ~~North~~table ~~America;~~(in ~~Asia/Pacific; Europe; Latin America; and Other.~~thousands):

Net sales and gross profit by geographic region are summarized in the following table (in thousands):


	August 30, 2025		May 31, 2025

PMT	$	77,804	$	76,143
GES		17,441		17,367
Canvys		9,390		9,289
Total	$	104,635	$	102,799

	Three Months Ended						Nine Months Ended
	March 1, 2025			March 2, 2024			March 1, 2025			March 2, 2024
Net Sales
North America	$	26,325		$	21,456		$	69,889		$	57,772
Asia/Pacific		10,772			12,116			32,369			34,988
Europe		14,498			16,081			47,732			46,542
Latin America		1,981			2,732			6,822			8,237
Other (1)		228			(10	)		208			1,547
Total	$	53,804		$	52,375		$	157,020		$	149,086
Gross Profit
North America	$	10,049		$	8,362		$	26,980		$	21,620
Asia/Pacific		3,503			2,902			10,493			10,217
Europe		4,204			4,824			13,647			14,105
Latin America		737			1,018			2,524			3,004
Other (1)		(1,820	)		(1,670	)		(5,219	)		(3,704	)
Total	$	16,673		$	15,436		$	48,425		$	45,242

The reconciliations of segment assets to the Consolidated Balance Sheets are summarized in the following table:

Other includes primarily net sales not allocated to a specific geographical region, unabsorbed value-add costs and other unallocated expenses.


	August 30, 2025		May 31, 2025

Total segment assets	$	104,635	$	102,799
Cash and cash equivalents		35,654		35,901
Accounts receivable		27,039		24,117
Prepaid expenses and other assets		2,948		3,070
Property, plant and equipment, net		18,439		18,355
Intangible assets, net		330		345
Right of use lease assets		2,026		2,276
Other non-current assets		301		228
Deferred income tax assets		8,695		8,744
Total assets	$	200,067	$	195,835

~~12. RISKS AND UNCERTAINTIES~~15

10. RISKS AND UNCERTAINTIES

Our business and the companies with which we do business are subject to risks and uncertainties caused by factors beyond our control. Such factors include economic pressures related to inflation, rising interest rates, economic weakness or recession, as well as geopolitical and public health, tightening labor markets, and pandemics. These and other similar conditions and events have in the past and could in the future disrupt our operations and could have a material adverse effect on our business, results of operations, cash flows and financial condition.

1716

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Certain statements in this report may constitute “forward-looking” statements within the meaning of the Private Securities Litigation Reform Act of 1995. The terms “may,” “should,” “could,” “anticipate," “believe,” “continue,” “estimate,” “expect,” “intend,” “objective,” “plan,” “potential," “project” and similar expressions are intended to identify forward-looking statements. These statements are not guarantees of future performance and involve risks, uncertainties and assumptions that are difficult to predict. These statements are based on management’s current expectations, intentions or beliefs and are subject to a number of factors, assumptions and uncertainties that could cause actual results to differ materially from those described in the forward-looking statements. Factors that could cause or contribute to such differences or that might otherwise impact the business include; economic, labor and political conditions; global business disruption caused by ~~the~~armed ~~Russian~~conflicts -in ~~Ukraine~~Europe and ~~Israel~~the -Middle ~~Hamas wars~~East; currency exchange fluctuations; and the ability of the Company to manage its growth and the risk factors set forth in our Annual Report on Form 10-K filed with the SEC on August 54, ~~2024~~2025. We undertake no obligation to update any such factor or to publicly announce the results of any revisions to any forward-looking statements contained herein whether as a result of new information, future events or otherwise.

In addition, while we do, from time to time, communicate with securities analysts, it is against our policy to disclose to them or any outside third party, any material non-public information or other confidential commercial information. Accordingly, stockholders should not assume that we agree with any statement or report issued by any securities analyst or outside third party, irrespective of the content of the statement or report. Thus, to the extent that reports issued by securities analysts contain any projections, forecasts or opinions, such reports are not our responsibility.

INTRODUCTION

Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) is intended to assist the reader in better understanding our business, results of operations, financial condition, changes in financial condition and significant developments. MD&A is provided as a supplement to, and should be read in conjunction with, our consolidated financial statements and the accompanying notes appearing elsewhere in this filing. This section is organized as follows:

•

Business Overview

•

Results of Operations – an analysis and comparison of our consolidated results of operations for the three month ~~and nine month~~ periods ended ~~March~~August 130, 2025 and ~~March~~August 231, 2024, as reflected in our Unaudited Consolidated Statements of Comprehensive ~~(Loss)~~ Income.

•

Liquidity, Financial Position and Capital Resources – a discussion of our primary sources and uses of cash for ~~the~~three ~~nine~~ month periods ended ~~March~~August 130, 2025 and ~~March~~August 231, 2024, and a discussion of changes in our financial position.

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. ~~Approximately~~More 50than 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. 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.

Some of the Company's products are manufactured in ~~China~~foreign countries and imported into the United States. Accordingly, the Company’s operations are subject to tariffs and other trade protection measures. The ~~Office~~U.S. ofadministration has instituted certain changes, and may make additional changes, in trade policies that include the ~~United~~negotiation ~~States~~or ~~Trade~~termination ~~Representative~~of ~~("USTR")~~trade ~~instituted~~agreements, higher tariffs on imports into the ~~importation~~U.S., ofand aother ~~number~~measures ofaffecting ~~products~~trade ~~into~~between the ~~United~~U.S. ~~States~~and other countries from ~~China~~which the Company imports. ~~These~~Due ~~tariffs~~in part to these measures, some countries are achanging ~~response~~their trade policies relating to ~~what~~goods imported from the ~~USTR~~U.S. ~~considers~~These toglobal betrade ~~certain~~disruptions ~~unfair~~and ~~trade~~geopolitical ~~practices~~tensions, bytogether ~~China.~~with Aany ~~number~~related ofdownturns in the ~~Company's~~global ~~products~~economy, ~~manufactured~~could indampen ~~China~~customer ~~are~~demand, ~~subject~~increase tomarket ~~duties~~volatility, ~~when~~and ~~imported~~impact ~~into~~currency exchange rates, all which could materially and adversely affect the ~~United~~Company’s ~~States~~financial performance.

Management continues to work with its suppliers as well as its customers to mitigate the impact of the tariffs on our customers. 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.17

18The 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. In addition, the impact of trade disruptions on general economic conditions and demand for electronic components is difficult to predict.

WeThe ~~currently~~recent ~~operate~~tariff ~~within~~modifications did not materially impact our results for the ~~following~~first ~~major~~quarter ~~geographic~~of ~~regions:~~fiscal ~~North~~2026. ~~America~~However, ~~Asia/Pacific~~it is possible that further tariffs may be imposed on imports of our products, ~~Europe~~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. 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 ~~Latin~~gross ~~America~~margins.

On January 24, 2025, the Company sold a substantial portion of its Healthcare assets to DirectMed Imaging, LLC (“DirectMed”) and entered into an exclusive 10-year global supply agreement in which Richardson will supply DirectMed with repaired Siemens CT X-ray tubes. Additionally, the Company will continue manufacturing ALTA CT X-ray tubes for DirectMed for approximately 12 to 18 months. This transaction resulted in loss of $4.9 million. Refer to Note 10, Disposal of Healthcare Assets and Related Charges, in Part I, Item 1 for transaction details.

The Company reports its financial performance based on the operating and reportable segments defined as follows:

Green Energy Solutions ("GES") combines our key technology partners and engineered solutions capabilities to design and manufacture innovative products for the fast-growing energy storage market and power management applications. As a designer, manufacturer, technology partner and authorized distributor, GES’s strategy is to provide specialized technical expertise and engineered solutions using our core design engineering and manufacturing capabilities on a global basis. We provide solutions and add value through design-in support, systems integration, prototype design and manufacturing, testing, logistics and aftermarket technical service and repair - all through our existing global infrastructure. GES’s focus is on products for numerous green energy applications such as wind, solar, hydrogen and ~~electric~~Electric ~~vehicles~~Vehicles, and other power management applications that support green solutions such as synthetic diamond manufacturing.

Canvys provides customized display solutions serving the corporate enterprise, financial, healthcare, industrial and medical original equipment manufacturers markets. Our engineers design, manufacture, source and support a full spectrum of solutions to match the needs of our customers. We offer long-term availability and proven custom display solutions that include touch screens, protective panels, custom enclosures, All-In-One computers, specialized cabinet finishes and application specific software packages and certification services. Our volume commitments are lower than the large display manufacturers, making us the ideal choice for companies with very specific design requirements. We partner with both private label manufacturing companies and leading branded hardware vendors to offer the highest quality display and touch solutions and customized computing platforms.

~~Healthcare~~We manufactures, repairs, refurbishes and distributes high value replacement parts and equipment for the healthcare market including hospitals, medical centers, asset management companies, independent service organizations and multi-vendor service providers. Products include diagnostic imaging replacement parts for CT and MRI systems; replacement CT and MRI tubes; CT service training; MRI and RF amplifiers; hydrogen thyratrons, klystrons, magnetrons; flat panel detector upgrades; pre-owned CT systems; and additional replacement solutions currently ~~under~~operate ~~development~~within ~~for~~ the ~~diagnostic~~following ~~imaging~~major ~~service~~geographic ~~market.~~regions: ~~Through~~North ~~a combination of newly developed products and partnerships~~America, ~~service offerings and training programs~~Asia/Pacific, weEurope ~~believe we can help our customers improve efficiency while lowering the cost of healthcare delivery. After the January 2025 sale of assets to DirectMed, the Company only manufactures~~ and ~~repairs~~Latin ~~CT tubes and sells them to DirectMed under an exclusive supply agreement~~America.

~~Refer to Note 11, Segment and Geographic Information, in Part I, Item 1 for a discussion of the operating results by segment and geographic area.~~18

RESULTS OF OPERATIONS

Financial Summary – Three Months Ended ~~March~~August 130, 2025

•

The ~~third~~first quarter of fiscal ~~2025~~2026 and fiscal ~~2024~~2025 both contained 13 weeks.

•

Net sales during the ~~third~~first quarter of fiscal ~~2025~~2026 were $5354.86 million, an increase of 21.76%, compared to net sales of $5253.47 million during the ~~third~~first quarter of fiscal ~~2024~~2025.

•

Gross margin increased to 31.0% during the ~~third~~first quarter of fiscal ~~2025~~2026 compared to 2930.56% during the ~~third~~first quarter of fiscal ~~2024~~2025.

•

Selling, general and administrative expenses were $1416.50 million or 2629.92% of net sales during the ~~third~~first quarter of fiscal ~~2025~~2026 compared to $1416.41 million or 2730.60% of net sales during the ~~third~~first quarter of fiscal ~~2024~~2025.

•

~~The~~Operating ~~disposal~~income during the first quarter of ~~certain~~fiscal ~~Healthcare~~2026 ~~assets~~was ~~generated~~$1.0 amillion ~~loss~~compared to an operating income of $40.93 million ~~for~~during the ~~third~~first quarter of fiscal 2025.

•

~~Operating~~Net ~~loss~~income during the ~~third~~first quarter of fiscal ~~2025~~2026 was $21.79 million compared to ana ~~operating~~net income of $1.0.6 million during the ~~third~~first quarter of fiscal ~~2024~~2025.

Net loss during the third quarter of fiscal 2025 was $2.1 million compared to a net income of $0.8 million during the third quarter of fiscal 2024.

Financial Summary – Nine Months Ended March 1, 2025

The first nine months of fiscal 2025 contained 39 weeks and the first nine months of fiscal 2024 contained 40 weeks.

Net sales during the first nine months of fiscal 2025 were $157.0 million, an increase of 5.3%, compared to net sales of $149.1 million during the first nine months of fiscal 2024.

Gross margin of 30.8% during the first nine months of fiscal 2025 increased compared to 30.3% during the first nine months of fiscal 2024.

Selling, general and administrative expenses were $46.6 million or 29.7% of net sales during the first nine months of fiscal 2025 compared to $44.7 million or 30.0% of net sales during the first nine months of fiscal 2024.

The disposal of certain Healthcare assets generated a loss of $4.9 million for the first nine months of fiscal 2025.

Operating loss during the first nine months of fiscal 2025 was $3.1 million compared to an operating income of $0.5 million during the first nine months of fiscal 2024.

Net loss during the first nine months of fiscal 2025 was $2.2 million compared to a net income of $0.2 million during the first nine months of fiscal 2024.

Net Sales and Gross Profit Analysis

Net sales by segment and percentage change during the ~~third~~first quarter ~~and first nine months~~ of fiscal ~~2025~~2026 and fiscal ~~2024~~2025 were as follows (in thousands):

	Three Months Ended				~~FY25~~FY26 vs. ~~FY24~~FY25
	March 1, 2025		March 2, 2024		% Change
	August 30, 2025		August 31, 2024		% Change
PMT	$	3339,~~216~~069	$	3138,~~163~~001		62.68	%
GES		97,~~299~~263		118,~~531~~086		-1910.42	%
Canvys		98,~~195~~275		67,~~590~~638		398.53	%
Healthcare		2,094		3,091		-32.3	%
Total	$	54,607	$	53,725		1.6	%
Total	$	53,804	$	52,375		2.7	%

	Nine Months Ended				FY25 vs. FY24
	March 1, 2025		March 2, 2024		% Change
PMT	$	101,815	$	98,199		3.7	%
GES		23,359		18,534		26.0	%
Canvys		23,684		23,770		-0.4	%
Healthcare		8,162		8,583		-4.9	%
Total	$	157,020	$	149,086		5.3	%

During the first quarter of fiscal 2026, consolidated net sales increased 1.6% compared to the first quarter of fiscal 2025. Sales for PMT increased 2.8%, sales for GES decreased 10.2% and sales for Canvys increased 8.3%. The increase in PMT was mainly due to increased semiconductor and electron tube products. The decrease in GES reflected the project-based nature of this segment and was mainly due to the non-recurrence of a large EV Locomotive order from the year ago quarter. The increase in Canvys was attributable to sales in the European markets.

20Gross profit by segment and percentage of net sales for the first quarter of fiscal 2026 and fiscal 2025 were as follows (in thousands):

During the third quarter of fiscal 2025, consolidated net sales increased 2.7% compared to the third quarter of fiscal 2024. Sales for PMT increased 6.6%, sales for GES decreased 19.4%, sales for Canvys increased 39.5% and sales for Healthcare decreased 32.3%. The increase in PMT was mainly due to increased sales of engineered solutions for the semiconductor wafer fabrication market. The decrease in GES was mainly due to a large order in fiscal 2024 that did not repeat in fiscal 2025's third quarter and a shipping delay on an EV locomotive order. The increase in Canvys was attributable to sales in the North American markets. The decrease in Healthcare reflected parts, service and equipment sales for two months due to the January 2025 sale of the majority of Healthcare assets to DirectMed.


	Three Months Ended
	August 30, 2025		% of Net Sales			August 31, 2024		% of Net Sales
PMT	$	12,226		31.3	%	$	11,431		30.1	%
GES		2,150		29.6	%		2,374		29.4	%
Canvys		2,553		30.9	%		2,621		34.3	%
Total	$	16,929		31.0	%	$	16,426		30.6	%

During the first nine months of fiscal 2025, consolidated net sales increased 5.3% compared to the first nine months of fiscal 2024. Sales for PMT increased 3.7%, sales for GES increased 26.0%, sales for Canvys decreased 0.4% and sales for Healthcare decreased 4.9%. The increase in PMT was mainly due to increased sales of engineered solutions for the semiconductor wafer fabrication market. The increase in GES was mainly due to increased shipments of power management products focused on numerous green energy applications. The decrease in Canvys was attributable to lower sales in the European markets. The decrease in Healthcare reflected parts, service and equipment sales for eight months due to the January 2025 sale of the majority of Healthcare assets to DirectMed.

Gross profit by segment and percentage of net sales for the third quarter and first nine months of fiscal 2025 and fiscal 2024 were as follows (in thousands):

	Three Months Ended
	March 1, 2025		% of Net Sales			March 2, 2024		% of Net Sales
PMT	$	10,243		30.8	%	$	8,815		28.3	%
GES		3,049		32.8	%		3,070		26.6	%
Canvys		3,056		33.2	%		2,265		34.4	%
Healthcare		325		15.5	%		1,286		41.6	%
Total	$	16,673		31.0	%	$	15,436		29.5	%

	Nine Months Ended
	March 1, 2025		% of Net Sales			March 2, 2024		% of Net Sales
PMT	$	30,875		30.3	%	$	29,231		29.8	%
GES		7,337		31.4	%		5,411		29.2	%
Canvys		7,848		33.1	%		8,070		34.0	%
Healthcare		2,365		29.0	%		2,530		29.5	%
Total	$	48,425		30.8	%	$	45,242		30.3	%

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.

Consolidated gross profit increased to $16.79 million during the ~~third~~first quarter of fiscal ~~2025~~2026 compared to $1516.4 million during the ~~third~~first quarter of fiscal ~~2024~~2025. Consolidated gross margin as a percentage of net sales during the ~~third~~first quarter of fiscal ~~2025~~2026 increased to 31.0% when compared to 2930.56% during the ~~third~~first quarter of fiscal ~~2024~~2025. This margin increase was mainly due to favorable product mix and improved manufacturing absorption in PMT and favorable product mix in GES with a partial offset from unfavorable product mix ~~in Canvys~~ and ~~manufacturing under absorption and~~ higher ~~component~~freight ~~scrap~~costs in ~~Healthcare~~Canvys.

Consolidated gross profit increased to $48.4 million during the first nine months of fiscal 2025 compared to $45.2 million during the first nine months of fiscal 2024. Consolidated gross margin as a percentage of net sales during the first nine months of fiscal 2025 was 30.8% compared to 30.3% for the first nine months of fiscal 2024. The improved margin was mainly due to favorable product mix in PMT partially offset by manufacturing under absorption, favorable product mix in GES, unfavorable product mix and increased freight costs in Canvys and higher component scrap in Healthcare.19

Power and Microwave Technologies

PMT net sales increased 62.68% to $3339.21 million during the ~~third~~first quarter of fiscal ~~2025~~2026 from $3138.20 million during the ~~third~~first quarter of fiscal ~~2024~~2025. The increase was due primarily to increased sales of engineered solutions for the semiconductor wafer fabrication market and higher sales of electron tubes. The decline in healthcare sales, which only include CT tubes, was due to the sale of assets to DirectMed in the third quarter of fiscal 2025, partially offset the sales growth for semiconductor and electron tube products. Gross margin as a percentage of net sales increased to 3031.83% during the ~~third~~first quarter of fiscal ~~2025~~2026 as compared to 2830.31% during the ~~third~~first quarter of fiscal ~~2024~~2025 due to product mix and improved manufacturing absorption.

PMT net sales increased 3.7% to $101.8 million during the first nine months of fiscal 2025 from $98.2 million during the first nine months of fiscal 2024. The increase was due primarily to increased sales of engineered solutions for the semiconductor wafer fabrication market. Gross margin as a percentage of net sales increased to 30.3% during the first nine months of fiscal 2025 as compared to 29.8% during the first nine months of fiscal 2024 due to favorable product mix partially offset by manufacturing under absorption.

Green Energy Solutions

GES net sales decreased 1910.42% to $97.32 million during the ~~third~~first quarter of fiscal ~~2025~~2026 from $118.51 million during the ~~third~~first quarter of fiscal ~~2024~~2025. The decrease reflected the project-based nature of this segment and was mainly due to a large EV Locomotive order in the ~~third~~first quarter of ~~fiscal~~2025 ~~2024~~ that did not repeat in ~~fiscal~~the ~~2025~~first ~~and~~quarter aof ~~shipping delay on an EV Locomotive order~~2026. Gross margin as a percentage of net sales increased to 3229.86% during the ~~third~~first quarter of fiscal ~~2025~~2026 as compared to 2629.64% during the ~~third~~first quarter of fiscal ~~2024~~2025 due to product mix.

GES net sales increased 26.0% to $23.3 million during the first nine months of fiscal 2025 from $18.5 million during the first nine months of fiscal 2024. The increase was mainly due to increased shipments of power management products focused on numerous green energy applications. Gross margin as a percentage of net sales increased to 31.4 % during the first nine months of fiscal 2025 as compared to 29.2% during the first nine months of fiscal 2024 due to product mix.

Canvys

Canvys net sales increased 398.53% to $98.23 million during the ~~third~~first quarter of fiscal ~~2025~~2026 from $67.6 million during the ~~third~~first quarter of fiscal ~~2024~~2025, due to higher sales in the ~~North~~European ~~American~~ markets. Gross margin as a percentage of net sales decreased to 3330.29% during the ~~third~~first quarter of fiscal ~~2025~~2026 from 34.43% during the ~~third~~first quarter of fiscal ~~2024~~2025 primarily due to product mix and higher freight costs.

Canvys net sales decreased 0.4% to $23.7 million during the first nine months of fiscal 2025 from $23.8 million during the first nine months of fiscal 2024, due to lower sales in the European markets. Gross margin as a percentage of net sales decreased to 33.1% during the first nine months of fiscal 2025 from 34.0% during the first nine months of fiscal 2024 due to product mix and higher freight costs.

Healthcare

Healthcare net sales decreased 32.3% to $2.1 million during the third quarter of fiscal 2025 from $3.1 million during the third quarter of fiscal 2024. With the sale to DirectMed on January 24, 2025, the third quarter sales for fiscal 2025 only reflected parts, service and equipment sales for two months. Gross margin as a percentage of net sales decreased to 15.5% during the third quarter of fiscal 2025 as compared to 41.6% during the third quarter of fiscal 2024 primarily due to manufacturing under absorption resulting from equipment downtime and higher component scrap expense.

Healthcare net sales decreased 4.9% to $8.2 million during the first nine months of fiscal 2025 from $8.6 million during the first nine months of fiscal 2024. With the sale to DirectMed on January 24, 2025, sales for first nine months of fiscal 2025 only reflected parts, service and equipment sales for eight months. Gross margin as a percentage of net sales decreased to 29.0% during the first nine months of fiscal 2025 as compared to 29.5% during the first nine months of fiscal 2024 primarily due to higher component scrap expense.

Selling, General and Administrative Expenses

Selling, general and administrative expenses (“SG&A”) ~~increased~~decreased to $1416.50 million for the ~~third~~first quarter of fiscal ~~2025~~2026 when compared to $1416.41 million for the year ago quarter. This ~~increase~~decrease of $0.1 million or less than 1% from the ~~third~~first quarter of fiscal ~~2024~~2025 mainly reflected ~~higher incentives due to sales growth, partially offset by~~ lower ~~R&D~~travel ~~and professional service expenses~~costs. Expressed as a percentage of net sales, SG&A was 2629.92% for the ~~third~~first quarter of fiscal ~~2025~~2026 compared to 2730.60% in the ~~third~~first quarter of fiscal ~~2024~~2025.

SG&A increased to $46.6 million for the first nine months of fiscal 2025 when compared to $44.7 million for the first nine months of fiscal 2024. This increase of $1.9 million or 4.2% from the first nine months of fiscal 2024 mainly reflected higher incentives due to sales growth, partially offset by lower R&D expenses. Expressed as a percentage of net sales, SG&A was 29.7% for the first nine months of fiscal 2025 compared to 30.0% for the first nine months of fiscal 2024.

Disposal of Healthcare Assets

A substantial portion of Healthcare assets were sold to DirectMed on January 24, 2025 that resulted in a total loss of $4.9 million for the third quarter and first nine months of fiscal 2025. The loss on assets sold to DirectMed totaled $3.0 million and the Company recorded an impairment charge of $1.9 million for inventory and fixed assets. Refer to Note 10, Disposal of Healthcare Assets and Related Charges, in Part I, Item 1 for more details.

Other Income/Expense

Other income and expense includes interest income, foreign exchange gains and foreign exchange losses. Our foreign exchange gains and losses are primarily due to the translation of U.S. dollars held in non-U.S. entities. We currently do not utilize derivative instruments to manage our exposure to foreign currency.

Other ~~expense~~income during the ~~third~~first quarter of fiscal ~~2025~~2026 totaled $01.34 million compared to ~~less than a~~ $0.13 million ~~expense~~ for ~~the~~first ~~third~~ quarter of fiscal ~~2024~~2025. ~~This~~The increase from the year ago quarter was mainly due to a non-recurring gain of $0.39 million ~~increase in foreign exchange losses~~.

Other expense during the first nine months of fiscal 2025 totaled $0.4 million, compared to $0.2 million for the first nine months of fiscal 2024. This increase was primarily due to a $0.3 million increase in foreign exchange losses.

Income Tax Provision

We recorded an income tax ~~benefit~~provision of $1.0.4 million and ~~an income tax provision of~~ $0.21 million for the ~~third~~first ~~quarter~~three months of fiscal ~~2025~~2026 and the ~~third~~first ~~quarter~~three months of fiscal ~~2024~~2025, respectively. The effective income tax rate during the ~~third~~first ~~quarter~~three months of fiscal ~~2025~~2026 was 33a tax provision of 18.41% as compared to 23a tax provision of 9.30% during the ~~third~~first ~~quarter~~three months of fiscal ~~2024~~2025. The difference in rate during the ~~third~~first ~~quarter~~three months of fiscal ~~2025~~2026 as compared to the ~~third~~first ~~quarter~~three months of fiscal ~~2024~~2025 reflects changes in our geographical distribution of income (loss) ~~and the discrete item related to the sale of healthcare assets resulting in a loss in the third quarter of fiscal 2025~~. The 3318.41% effective income tax rate differs from the federal statutory rate of 21% as a result of our geographical distribution of income (loss), ~~as well as the book loss on the sale of healthcare assets~~ and the utilization of the U.S. research and development credit.

WeThe Company recorded ana ~~income tax benefit of~~ $10.3 million ~~and~~uncertain ~~an income~~ tax ~~provision~~position ofas ~~$0.1 million for the first nine months~~ of ~~fiscal~~August ~~2025 and for the first nine months of fiscal 2024~~30, ~~respectively. The effective income tax rate during the first nine months of fiscal~~ 2025 ~~was a tax benefit of 36.5%~~ as compared to a$0.3 ~~tax~~million ~~provision~~as of ~~39.2%~~May ~~during~~31, ~~the~~2025. ~~first~~We ~~nine~~record ~~months~~interest ofrelated ~~fiscal~~to ~~2024.~~uncertain ~~The~~tax ~~difference~~positions in ~~rate during~~ the ~~first~~income ~~nine~~tax ~~months~~expense ofline ~~fiscal~~item ~~2025~~within ~~as compared to~~ the ~~first~~Consolidated ~~nine~~Statements ~~months~~ of ~~fiscal~~Comprehensive ~~2024~~Income. ~~reflects~~Accrued ~~changes~~interest inwas ~~our~~included ~~geographical~~within ~~distribution of income (loss) and~~ the ~~discrete item~~ related totax ~~the~~liability ~~sale~~line ~~of healthcare assets resulting~~ in ~~a loss in~~ the ~~third~~Consolidated ~~quarter~~Balance ~~of fiscal 2025~~Sheets. ~~The~~We ~~36.5%~~have ~~effective~~recorded ~~income tax rate differs from the federal statutory rate of 21% as~~ a ~~result~~liability of ~~our~~less ~~geographical~~than ~~distribution~~$0.1 ofmillion ~~income~~for ~~(loss),~~interest as ~~well as the book loss on the sale~~ of ~~healthcare~~August ~~assets~~30, 2025 and ~~the~~May ~~utilization~~31, ~~of the U~~2025.~~S. research and development credit.~~

InThe ~~the~~Company ~~normal~~maintains ~~course~~a valuation allowance representing the portion of ~~business,~~the wedeferred ~~are~~tax ~~subject~~asset tothat ~~examination~~management bydoes ~~taxing~~not ~~authorities~~believe ~~throughout~~is ~~the~~more ~~world.~~likely ~~Years~~than ~~prior~~not to ~~fiscal~~be ~~2015~~realized. ~~are~~The ~~closed~~valuation ~~for~~allowance ~~examination~~was ~~under~~$2.9 ~~the~~million ~~statute~~as of ~~limitation~~August ~~for U.S. federal~~30, 2025 and U$2.S.8 ~~state.~~million Inas ~~Netherlands~~of May 31, ~~years~~2025. ~~prior~~The tovaluation ~~fiscal~~allowance ~~2020~~relates ~~are~~to ~~closed~~state ~~for~~NOLs ~~examination~~($1.7 Wemillion) ~~are~~and ~~under~~deferred ~~examination~~tax assets in ~~Germany~~foreign ~~for~~jurisdictions ~~fiscal~~where ~~years~~historical ~~2019~~taxable tolosses ~~2022~~have been incurred ($1.2 ~~During~~million). The amount of the ~~third~~deferred ~~quarter~~tax ofasset ~~fiscal~~considered ~~2025~~realizable, wehowever, ~~received~~could abe ~~notice~~adjusted ~~from~~if ~~the~~estimates ~~State~~ of ~~Illinois~~future ~~for~~taxable an income ~~tax~~during ~~audit covering~~ the carryforward period ~~from~~are ~~June~~increased, ~~2021~~or toif ~~May~~objective ~~2023.~~negative Weevidence ~~have~~in the form of cumulative losses is no ~~other~~longer ~~current~~present ~~open~~and ~~audits~~additional inweight ~~the~~may Ube given to subjective evidence such as our projections for growth.S.

2320

~~The~~We have considered the impact of the One Big Beautiful Bill Act ("OBBBA") on the Company’s ~~recorded~~annual $0effective tax rate.3 ~~million~~The ~~for~~impact ~~uncertain~~of OBBBA on the annual effective tax ~~positions~~rate asincludes ofthe ~~March~~reduction 1,in ~~2025~~the asresearch ~~compared~~and todevelopment ~~$0.1~~credit ~~million as~~from ofthe ~~June~~Section 1,280c ~~2024~~election. WeThese ~~record~~changes ~~interest~~did ~~related~~not tohave ~~uncertain~~a ~~tax~~significant ~~positions~~impact into the ~~income~~annual effective tax ~~expense~~rate. ~~line~~However, ~~item~~the ~~within~~enactment of the ~~Unaudited~~OBBBA ~~Consolidated~~introduced ~~Statements~~several ofsignificant ~~Comprehensive~~tax ~~(Loss)~~law ~~Income.~~modifications ~~Accrued~~that, ~~interest~~while ~~was~~not ~~included~~affecting ~~within~~ the ~~related~~annual effective tax ~~liability~~rate, ~~line~~do inhave ~~the~~other ~~Consolidated~~implications ~~Balance~~for ~~Sheets~~the Company. WeThe ~~have~~OBBBA ~~recorded~~makes apermanent ~~liability~~key elements of ~~less~~the ~~than~~2017 ~~$0.1~~Tax ~~million~~Cuts ~~for~~and ~~interest~~Jobs Act, including 100% bonus depreciation and ~~penalties~~domestic asresearch itcost ~~relates~~expensing pursuant to IRC §174 for fiscal years beginning after December 31, 2024. The Company is currently evaluating the ~~reserve~~future impact of ~~the~~OBBA ~~research~~on its financial position and ~~development~~these ~~credit~~changes asare ofanticipated ~~March~~to 1,have ~~2025~~an ~~and~~impact ~~June~~on 1,the ~~2024,~~results ~~respectively~~of operations and cash flows.

Net ~~(Loss)~~ Income and Per Share Data

Net ~~loss~~income during the ~~third~~first quarter of fiscal ~~2025~~2026 was $2.1.9 million, or $0.1513 per diluted common share and $0.1312 per Class B diluted common share as compared to a net income of $0.86 million during the ~~third~~first quarter of fiscal ~~2024~~2025 or $0.0504 per diluted common share and $0.0504 per Class B diluted common share.

Net loss during the first nine months of fiscal 2025 was $2.2 million, or $0.16 per diluted common share and $0.14 per Class B diluted common share as compared to a net income of $0.2 million during the first nine months of fiscal 2024 or $0.01 per diluted common share and $0.01 per Class B diluted common share.21

LIQUIDITY, FINANCIAL POSITION AND CAPITAL RESOURCES

Our operations and cash needs have been primarily financed through operations and cash on hand.

Cash and cash equivalents were $3635.7 million at ~~March~~August 130, 2025. Cash and cash equivalents by geographic area on ~~March~~August 130, 2025 consisted of $2016.35 million in North America, $810.31 million in Europe, $1.0 million in Latin America and $78.1 million in Asia/Pacific. No cash was repatriated to the United States in the first ~~nine~~three months of fiscal ~~2025~~2026. 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. ~~The January 24, 2025 sale of certain Healthcare assets to DirectMed generated $8.2 million of cash which will be utilized to support opportunities in our Green Energy Solutions business.~~ See Note 89, Income Taxes, of the notes to our consolidated financial statements in Part II, Item 8 of ~~this~~our Annual Report on Form 10-K for the fiscal year ended ~~June~~May 131, ~~2024~~2025, filed with the SEC on August 54, ~~2024~~2025, for further information.

Cash and cash equivalents were $2435.39 million at ~~June~~May 131, ~~2024~~2025. Cash and cash equivalents by geographic area at ~~June~~May 131, ~~2024~~2025 consisted of $719.15 million in North America, $7.37 million in Europe, $10.19 million in Latin America and $87.8 million in Asia/Pacific. WeNo ~~repatriated~~cash ~~$0.3~~was ~~million~~repatriated to the United States in ~~the second quarter of~~ fiscal ~~2024 from our entity in Mexico~~2025.

Our short-term and long-term liquidity requirements primarily arise from: (i) working capital requirements, (ii) capital expenditure needs and (iii) cash dividend payments (if and when declared by our Board of Directors). Our ability to fund these requirements will depend, in part, on our future cash flows, which are determined by our future operating performance and, therefore, subject to prevailing global macroeconomic conditions and financial, business and other factors, some of which are beyond our control.

Based on past performance and current expectations, we believe that the existing sources of liquidity, including current cash, will provide sufficient resources to meet known capital requirements and working capital needs through the next twelve months. Additionally, while our future capital requirements will depend on many factors, including, but not limited to, the economy and the outlook for growth in our markets, we believe our existing sources of liquidity as well as our ability to generate operating cash flows will satisfy our future obligations and cash requirements.

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. 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. ~~The~~There ~~Company~~were ~~utilized~~no ~~$1.0~~drawings ~~million~~or ofrepayments ~~the~~under ~~credit line and repaid that $1.0 million during~~ the ~~first~~Revolving ~~quarter~~Credit ofFacility ~~fiscal~~as ~~2025. There was no utilization~~ of ~~the~~August ~~credit~~30, ~~line~~2025 ~~during the second~~ and ~~third~~through ~~quarters~~the ofreport ~~fiscal~~release ~~2025~~date. As of ~~the~~August ~~end~~30, ~~of the third quarter for fiscal~~ 2025 and through the ~~date~~report ofrelease ~~this report~~date, no amounts were outstanding under the Revolving Credit Facility.

On October 7, 2025, the Company executed a three-year extension to the Credit Agreement through the Second Amendment to the Credit Agreement with a maximum borrowing limit of $20 million. The terms of the new agreement are similar to the previous Credit Agreement. See Note 5, Revolving Credit Facility, included in Part I, Item 1 for further information.

Cash Flows from Operating Activities

Cash flows from operating activities are primarily a result of our net income ~~(loss)~~ adjusted for non-cash items and changes in our operating assets and liabilities.

Operating activities generated $101.54 million of cash during the first ~~nine~~three months of fiscal ~~2025~~2026. We had a net ~~loss~~income of $21.29 million during the first ~~nine~~three months of fiscal ~~2025~~2026, which included non-cash ~~stock~~share-based compensation expense of $10.26 million associated with the issuance of stock option and restricted stock awards, inventory reserve provisions of $0.31 million, unrealized foreign exchange ~~loss~~gain of $0.45 million, depreciation and amortization expense of $31.0 million associated with our property, plant and equipment and intangible assets ~~and the disposal loss on Healthcare assets of $4~~.9 ~~million.~~ Changes in our operating assets and liabilities ~~generated~~utilized $21.8 million in cash during the first ~~nine~~three months of fiscal ~~2025~~2026, net of foreign currency exchange gains and losses, included an increase in accounts ~~payable~~receivable ~~and accrued liabilities~~ of $32.17 million, an increase in ~~accounts~~inventories ~~receivable~~ of $10.56 million and aan ~~decrease~~increase in ~~inventories~~accounts payable and accrued liabilities of $1.15 million. The increase in accounts receivable was primarily due to the higher level of sales compared to the fourth quarter of fiscal 2025. The ~~changes~~change in accounts payable and accrued liabilities ~~were~~was timing related.

2522

Operating activities ~~used~~generated $0.74 million of cash during the first ~~nine~~three months of fiscal ~~2024~~2025. We had a net income of $0.26 million during the first ~~nine~~three months of fiscal ~~2024~~2025, which included non-cash ~~stock~~share-based compensation expense of $1.0.6 million associated with the issuance of stock option and restricted stock awards, inventory reserve provisions of $0.51 million, unrealized foreign exchange gain of $0.4 million and depreciation and amortization expense of $31.20 million associated with our property, plant and equipment asand ~~well as amortization of our~~ intangible assets. Changes in our operating assets and liabilities used $51.79 million in cash during the first ~~nine~~three months of fiscal ~~2024~~2025, net of foreign currency exchange gains and losses included an increase in inventory of $20.21 million, ~~a decrease in accounts payable of $5.2 million~~ and an increase in ~~prepayments~~accounts receivable of $05.19 million. Partially offsetting the cash utilization was aan ~~decrease~~increase in ~~receivables~~accounts ofpayable ~~$1.0 million~~ and ~~an increase in~~ accrued liabilities of $04.61 million. The ~~decrease~~increase in accounts receivable was primarily due to the ~~lower~~higher level of sales ~~across~~for ~~our operating segments in~~ the current quarter. ~~Most~~compared ofto the ~~inventory~~prior ~~increase supported the products for electron tubes and Healthcare~~quarter. The changes in accounts payable and accrued liabilities were timing related.

Cash Flows from Investing Activities

Cash ~~provided~~used byin investing activities of $51.0 million during the first ~~nine~~three months of fiscal ~~2025~~2026 was due to ~~the $7.0 million of proceeds from the disposal of Healthcare assets and $2.0 million offset for~~ capital expenditures. Capital expenditures were primarily related to our IT system and LaFox manufacturing and facilities. LaFox manufacturing primarily supports the ~~Electron~~PMT ~~Device Group~~ and ~~Green~~GES ~~Energy Solutions~~segments.

Cash used in investing activities of $30.19 million during the first ~~nine~~three months of fiscal ~~2024~~2025 was due to capital expenditures. Capital expenditures were primarily related to our IT system and ~~the~~ LaFox manufacturing and facilities ~~renovation~~. LaFox manufacturing primarily supports the ~~Electron~~PMT ~~Device Group~~ and ~~Green~~GES ~~Energy Solutions~~segments.

Cash Flows from Financing Activities

Cash flows used in financing activities consist primarily of cash dividends and cash flows provided by financing activities consist primarily of the proceeds from the issuance of stock. All future dividend payments are at the discretion of the Board of Directors. Dividend payments depend on earnings, capital requirements, operating conditions and such other factors that the Board may deem relevant.

Cash used byin financing activities of $20.49 million during the first ~~nine~~three months of fiscal ~~2025~~2026 primarily resulted from $20.69 million of dividend payments to stockholders partially offset by $0.31 million of proceeds from the issuance of stock.

Cash used byin financing activities of $20.39 million during the first ~~nine~~three months of fiscal ~~2024~~2025 primarily resulted from $20.59 million of dividend payments to stockholders partially offset by $0.31 million of proceeds from the issuance of stock.

Critical Accounting Estimates

~~There~~The ~~have~~preparation ~~been~~of nofinancial ~~material~~statements ~~changes~~ in ~~our~~conformity ~~critical~~with ~~accounting~~United ~~estimates~~States ~~from~~Generally ~~those~~Accepted ~~disclosed~~Accounting inPrinciples ~~our~~("GAAP”) ~~Annual~~and ~~Report~~pursuant onto ~~Form~~the ~~10-K~~rules ~~for~~and regulations of the ~~year~~SEC, ~~ended~~we ~~June~~make 1assumptions, ~~2024,~~judgments ~~filed~~and ~~with~~estimates that affect the ~~SEC~~reported onamounts ~~August~~of 5assets, ~~2024~~liabilities, revenue and expenses and the related disclosures of contingent assets and liabilities. WeOur assumptions, judgments and estimates are ~~not~~based ~~aware~~on ofhistorical ~~any~~experience ~~specific~~and ~~events~~various orother ~~circumstances~~factors ~~that~~deemed ~~would~~relevant. ~~require~~Actual usresults tocould ~~update~~be ~~our~~materially different from those estimates, under different assumptions ~~and~~or conditions. We evaluate our assumptions, judgments and estimates on a regular basis. We also discuss our critical accounting estimates with the Audit Committee of the Board of Directors.

There have been no material changes in our critical accounting estimates from those disclosed in our Annual Report on Form 10-K for the year ended May 31, 2025, filed with the SEC on August 4, 2025. We are not aware of any specific events or circumstances that would require us to update our estimates, assumptions and judgments.

Impact of New Accounting Standards

For information about recently issued accounting pronouncements, see Note 43, New Accounting Pronouncements - Not Yet Adopted, included in Part 1I, Item 1.

2623

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Risk Management and Market Sensitive Financial Instruments

We are exposed to many different market risks with the various industries we serve. The primary financial risk we are exposed to is foreign currency exchange, as certain of our operations, assets and liabilities are denominated in foreign currencies. We manage these risks through normal operating and financing activities.

The interpretation and analysis of these disclosures should not be considered in isolation since such variances in exchange rates would likely influence other economic factors. Such factors, which are not readily quantifiable, would likely also affect our operations. Additional disclosure regarding various market risks is set forth in Part I, Item 1A, “Risk Factors” of our Annual Report on Form 10-K for the fiscal year ended ~~June~~May 131, ~~2024~~2025 filed with the SEC on August 54, ~~2024~~2025.

ITEM 4. CONTROLS AND PROCEDURES

(a) Evaluation of Disclosure Controls and Procedures

Management of the Company, with the participation of the Chief Executive Officer and the Chief Financial Officer, evaluated the effectiveness of the design and operation of the Company’s disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) as of ~~March~~August 130, 2025.

Disclosure controls and procedures are intended to provide reasonable assurance that information required to be disclosed in the Company’s Exchange Act reports is recorded, processed, summarized and reported within the time periods specified by the Securities and Exchange Commission’s rules and forms, and that such information is accumulated and communicated to management, including the Company’s Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure. Based on this evaluation, the Company’s Chief Executive Officer and Chief Financial Officer have concluded that the Company’s disclosure controls and procedures were effective as of the end of the period covered by this report.

(b) Changes in Internal Control over Financial Reporting

There were no changes in the Company’s internal control over financial reporting identified in connection with the evaluation required by paragraph (d) of Exchange Act Rules 13a-15 or 15d-15 that occurred during the ~~third~~first quarter of fiscal ~~2025~~2026 that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

2724

PART II. OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

None

ITEM 1A. RISK FACTORS

There have been no material changes to the risk factors previously disclosed in our Annual Report on Form 10-K for the fiscal year ended ~~June~~May 131, ~~2024~~2025, filed with the SEC on August 54, ~~2024~~2025.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES, AND USE OF PROCEEDS ~~AND ISSUER PURCHASES OF~~

EQUITY SECURITIES

None.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

Not applicable.

ITEM 4. MINE SAFETY DISCLOSURES

Not applicable.

ITEM 5. OTHER INFORMATION

a) ~~First~~Form ~~Amendment~~8-K todisclosures ~~PNC~~for ~~Credit~~the ~~Agreement~~quarter covered by this Form 10-Q:

OnSubmission ~~April 9, 2025, the Company and certain~~ of ~~its~~Matters ~~subsidiaries (collectively, the “Loan Parties”) entered into the First Amendment (the “First Amendment”)~~ to ~~the~~Vote ~~Credit~~of ~~Agreement,~~Security dated March 20, 2023 (as amended, restated, supplemented or otherwise modified from time to time, the “Credit Agreement”), by and among the Company, the Guarantors party thereto, the Lenders party thereto, and PNC Bank, National Association, as Administrative Agent thereunder (“PNC”). Holders

~~The~~We ~~First~~held ~~Amendment~~our ~~amends~~annual ~~the~~meeting ~~Credit~~of ~~Agreement~~stockholders toon ~~modify~~October 7, 2025. At the ~~definition~~annual meeting, our stockholders (i) elected each of ~~“Consolidated~~the ~~EBITDA”~~nominees listed below to ~~take~~the ~~into~~Company’s ~~account~~Board of Directors to serve for a term expiring at the ~~non-recurring~~2026 ~~non-cash~~Annual ~~loss~~Meeting; in(ii) ratified the ~~amount~~selection of $4BDO USA,~~920~~ P.C. as our independent registered public accounting firm for fiscal 2026; (iii) approved,~~000~~ ~~recognized~~on byan advisory basis, the compensation of the Company’s innamed ~~connection~~executive ~~with~~officers; ~~the~~(iv) ~~consummation~~approved ofan amendment to the ~~transactions~~Amended ~~contemplated~~and byRestated ~~that~~2011 ~~certain~~Long-Term ~~Asset~~Incentive ~~Purchase~~Plan ~~Agreement,~~to ~~dated~~increase ~~January~~the ~~24,~~number ~~2025~~of (shares available for issuance under the ~~“Purchase~~plan ~~Agreement”~~and (v), byapproved the Second Amended and ~~between~~Restated Certificate of Incorporation to increase the ~~Company~~number ~~and~~of ~~DirectMed~~authorized ~~Imaging,~~shares ~~LLC~~of common stock.

The ~~effectiveness~~final ofresults ~~the~~for ~~modifications to~~ the ~~Credit~~votes ~~Agreement~~regarding ~~contemplated by the First Amendment is conditioned on the receipt by PNC of (a) the First Amendment duly executed by the Loan Parties,~~ each ~~Lender~~proposal ~~party~~are ~~thereto~~set ~~and~~forth ~~the Administrative Agent; and (b) an executed copy of the Purchase Agreement, together with all schedules and exhibits thereto.~~ below:

1. The ~~foregoing~~voting ~~description~~results ofwith ~~the~~respect ~~First Amendment does not purport~~ to ~~be complete and is qualified in its entirety by reference to~~ the ~~full~~election ~~text~~ of ~~the~~each ~~First~~director ~~Amendment,~~were ~~attached to this Form 10-Q~~ as ~~Exhibit 5.01, and incorporated herein by reference.~~follows

b) None.


Nominee	For		Against/Withhold		Broker Non-Votes
Edward J. Richardson		26,534,988		1,846,598		1,560,278
Wendy S. Diddell		28,108,887		272,699		1,560,278
Jacques Belin		25,234,034		3,147,552		1,560,278
James Benham		25,218,445		3,163,141		1,560,278
Kenneth Halverson		25,235,834		3,145,752		1,560,278
Robert H. Kluge		26,413,163		1,968,423		1,560,278
Paul J. Plante		23,996,877		4,384,709		1,560,278

~~c) 10b5-1 trading arrangements: None.~~25

2. The voting results with respect to the ratification of the selection of BDO USA, P.C. as our independent registered public accounting firm for fiscal 2026 was approved with 28,757,417 votes “FOR”, 1,170,313 votes “AGAINST/WITHHOLD” and 14,134 votes “ABSTAIN”.

3. The voting results with respect to the approval, on an advisory basis, the compensation of our Named Executive Officers was approved with 27,967,319 votes “FOR”, 340,869 votes “AGAINST/WITHHOLD” and 73,398 votes “ABSTAIN" and 1,560,278 broker non-votes.

4. The voting results with respect to Amended and Restated 2011 Long-Term Incentive Plan to increase the number of shares available for issuance under the plan approved with 23,822,697 votes “FOR”, 3,181,295 votes “AGAINST/WITHHOLD” and 1,377,594 votes “ABSTAIN" and 1,560,278 broker non-votes.

5. The voting results with respect to the Second Amended and Restated Certificate of Incorporation to increase the number of authorized shares of common stock was approved with the following votes by class of stock:


Nominee	For		Against/Withhold		Abstain
Common stock		9,521,479		323,006		5,809

Class B common stock		20,091,570		-		-

Common and Class B stock combined		29,613,049		323,006		5,809

b) Not applicable.

c) 10b5-1 trading arrangements:

None.

ITEM 6. EXHIBITS

Exhibit Index

ExhibitNumber		Description
3.1		Second Amended and Restated Certificate of Incorporation of the Company (incorporated by reference to Annex III of the Definitive Proxy Statement on Schedule 14A dated August 2225, ~~2014~~2025).
3.2		Amended and Restated By-Laws of the Company (incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K filed with the SEC on June 15, 2017).
5.01		First Amendment to Credit Agreement, dated April 9, 2025, by and among the Company, the Guarantors party thereto, the Lenders party thereto, and PNC Bank, National Association, as Administrative Agent.
10.1		Second Amendment to the Credit Agreement, dated as of October 7, 2025, among the Company, the Guarantors party thereto, the Lenders party thereto and PNC Bank NA, as Administrative Agent, Swingline Lender and Issuing Lender thereunder.
31.1		Certification of Edward J. Richardson pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2		Certification of Robert J. Ben pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32		Certifications pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101		The following financial information from our Quarterly Report on Form 10-Q for the ~~third~~first quarter of fiscal ~~2025~~2026, filed with the SEC on ~~April~~October 109, 2025, formatted in Inline Extensible Business Reporting Language (iXBRL): (i) the ~~Unaudited~~ Consolidated Balance Sheets, (ii) the Unaudited Consolidated Statements of Comprehensive ~~(Loss)~~ Income, (iii) the Unaudited Consolidated Statements of Cash Flows, (iv) the Unaudited Consolidated ~~Statement~~Statements of Stockholders’ Equity and (v) Notes to Unaudited Consolidated Financial Statements.
101.INS		Inline XBRL Instance Document – the instance document does not appear in the Interactive Data File because XBRL tags are embedded within the Inline XBRL document.
101.SCH		Inline XBRL Taxonomy Extension Schema With Embedded Linkbase Documents.
104		Cover Page Interactive Data File (embedded within the Inline XBRL document).

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SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	RICHARDSON ELECTRONICS, LTD.
Date: April 10, 2025	By:	/s/ Robert J. Ben
Date: October 9, 2025	By:	/s/ Robert J. Ben
		Robert J. BenChief Financial Officer and Chief Accounting Officer (on behalf of the Registrant and as Principal Financial Officer)

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