Richardson Electronics (NASDAQ:RELL) reported a stronger fourth quarter and fiscal 2026 performance, with management pointing to broad-based demand across its Power & Microwave Technologies, Green Energy Solutions and Canvys businesses, while also emphasizing continued investment in engineered solutions and battery energy storage.
Chairman and Chief Executive Officer Ed Richardson said the company’s fiscal 2026 results reflected “significant year-over-year revenue growth, improved gross margin, and strengthened operating performance.” He said the performance was not driven by a single product line, customer or end market, citing demand from semiconductor wafer fab equipment, defense, healthcare, industrial applications, wind, EV, power conversion and customized display markets.
Fourth-Quarter Sales Rise 27.6%
Chief Financial Officer Bob Ben said consolidated net sales increased 27.6% in the fiscal fourth quarter to $66.2 million, compared with $51.9 million in the prior-year quarter. He said it marked the company’s eighth consecutive quarter of year-over-year sales growth and its highest quarterly net sales since the third quarter of fiscal 2023.
The fourth quarter was led by a 28.1% increase in Power & Microwave Technologies sales, driven by growth in semiconductor wafer fab and RF and microwave products. Green Energy Solutions sales rose 20.4% from the prior-year quarter to $1.1 million, helped by higher wind product sales. Canvys sales increased 29.5%, or $2.8 million, reflecting higher sales in North America.
Consolidated gross margin was 31.2% of net sales, down from 31.6% in the same quarter a year earlier. Ben said the decline was due to lower margins in PMT and GES from product mix, partly offset by higher Canvys margins tied to improved freight costs as a percentage of net sales.
Operating expenses rose to $17.6 million from $15.6 million, driven by higher salaries and incentives related to sales growth. The quarter also included a $0.4 million unclaimed property state audit settlement. As a percentage of sales, operating expenses improved to 26.6% from 30.0%.
Operating income was $3.9 million, compared with $0.6 million a year earlier. Net income was $3.7 million, or $0.25 per diluted share, compared with net income of $1.1 million, or $0.08 per diluted share, in the prior-year quarter. Non-GAAP net income was $3.0 million, or $0.21 per diluted share.
Full-Year Revenue and Profitability Improve
For fiscal 2026, Richardson Electronics reported net sales of $228.6 million, up 9.4% from $208.9 million in fiscal 2025. Ben said the increase reflected higher sales across all three business segments.
Full-year gross margin was 31.2%, up 20 basis points from fiscal 2025. Operating expenses improved to 28.8% of net sales from 29.8% in the prior year. Operating income was $6.5 million, compared with an operating loss of $2.5 million in fiscal 2025.
The company reported net income of $6.4 million, or $0.44 per diluted share, compared with a net loss of $1.1 million, or $0.08 per diluted share, in fiscal 2025. Non-GAAP net income was $5.7 million, or $0.40 per diluted share.
Cash and cash equivalents totaled $31.8 million at fiscal year-end, compared with $29.5 million at the end of the third quarter and $35.9 million at the end of fiscal 2025. The company had no outstanding debt on its revolving credit line with PNC Bank. Ben also said the board declared a regular quarterly cash dividend of $0.06 per common share, payable in the first quarter of fiscal 2027.
PMT, GES and Battery Energy Storage Highlight Growth Plans
Greg Peloquin, general manager of Power & Microwave Technologies and Green Energy Solutions, said both groups remain key parts of the company’s multi-year growth plan. GES sales grew 20.4% in the fourth quarter and 7.3% for the full fiscal year, while PMT sales excluding the legacy healthcare business were $47.1 million in the quarter, up 31.1% from the prior-year period.
Peloquin said PMT benefited from RF and wireless components in SATCOM, radar and communications markets, as well as continued strength in semiconductor wafer fab demand. He said semiconductor wafer fab customers have expressed optimism about continued growth into calendar 2027.
In GES, Peloquin highlighted broader adoption of the company’s pitch energy modules across wind turbine platforms, including partnerships with major GE wind turbine owner-operators such as RWE, Invenergy, Enel and NextEra. He said the company has received orders outside North America from customers in Brazil, Australia, India, France and Italy.
Peloquin also said the company shipped its first battery energy storage program in the fourth quarter and now has a pipeline of nearly 50 active opportunities. He said the company expects to announce a multimillion-dollar order for battery energy storage systems in the first quarter.
During the question-and-answer session, Peloquin said the company is not primarily targeting “mega” data center projects. Instead, he described the focus as smaller commercial, industrial and utility applications, including systems of 760 kilowatts and 5 megawatts that can be stacked for larger needs. He said one booked opportunity involves 17 units for a federal reservation in Alaska, using Gotion batteries.
Canvys Posts Record Quarter
Jens Ruppert, general manager of Canvys, said the custom display business posted fourth-quarter revenue of $12.3 million, up 29.5% from $9.5 million a year earlier, setting a new quarterly revenue record for the unit. Full-year Canvys revenue was $37.3 million, up 12.4% from $33.1 million.
Canvys gross margin was 32.3% in the fourth quarter, compared with 32.1% a year earlier. For the full year, gross margin was 32.0%, down from 32.9% in fiscal 2025. Ruppert said product mix, tariffs, freight and other supply chain costs continued to create pressure.
The Canvys backlog increased to $40.8 million at the end of the fourth quarter from $38.2 million at the end of the third quarter. Ruppert said the business had a fourth-quarter book-to-bill ratio of 1.3 and entered the new fiscal year with a solid order book and improved visibility, while noting that the business remains project-focused and can vary by customer program timing.
Management Emphasizes Efficiency and Capital Discipline
Chief Operating Officer Wendy Diddell said the company remains focused on accelerating growth and improving efficiency. She said Richardson Electronics is now focused entirely on repairing Siemens CT tubes, sold most assets tied to the ALTA tube program during the fourth quarter and downsized its CT healthcare team.
Diddell also said the company closed its Powerlink Dubai operations, transferring work to its Powerlink U.K. location. She said management is looking for ways to free up cash for growth initiatives by improving efficiency in core operations.
On artificial intelligence, Diddell said the company completed a 90-day AI advisory engagement that identified and triaged 47 AI opportunities, including 32 that are ready to execute using existing tools. She said six pilot programs have been validated for execution.
In response to a shareholder question about returning additional capital through buybacks or dividends, Ed Richardson said the board discusses the issue regularly but has concluded that the company is better served deploying capital into growth opportunities rather than buying back stock.
Richardson closed the call by saying the macroeconomic environment remains uncertain, citing tariff uncertainty, geopolitical risk, inflation and uneven industrial demand. However, he said the company believes its balance sheet, focus on engineered solutions and exposure to power management, energy storage, semiconductor manufacturing, defense and customized display markets position it to build on fiscal 2026 progress.
About Richardson Electronics (NASDAQ:RELL)
Richardson Electronics, Ltd. (NASDAQ:RELL) is a global manufacturer, distributor and servicer of engineered components and subsystems for a diverse range of industrial, medical and scientific applications. The company specializes in vacuum electron devices, high-voltage power supplies and related electronic components, offering klystrons, traveling wave tubes, magnetrons, X-ray tubes, microwave amplifiers and power conversion products. Its solutions support customers in power grid management, semiconductor processing, medical imaging, scientific instrumentation and telecommunications.
In addition to its manufacturing capabilities, Richardson Electronics maintains a broad distribution network comprising thousands of standard and custom parts.
