Cuộc họp công bố kết quả kinh doanh quý 1 năm tài chính 2027 của Richardson Electronics (RELL): Doanh thu tăng 18.9%

Nội dung trọng tâm

• Doanh số thuần quý 1 năm tài chính 2027 tăng 18,9% so với cùng kỳ năm trước lên 64,9 triệu USD, đánh dấu quý thứ chín liên tiếp Richardson Electronics đạt tăng trưởng doanh số so với cùng kỳ.
• Biên lợi nhuận gộp mở rộng lên 34,6% từ mức 31,0%. Khoản hoàn thuế IEEPA đóng góp 170 điểm cơ bản vào biên lợi nhuận của quý.
• Lợi nhuận từ hoạt động kinh doanh tăng hơn 400% lên 5,1 triệu USD, tương đương 7,9% doanh số. EPS pha loãng tăng lên 0,27 USD từ mức 0,13 USD.
• Lượng đơn hàng tồn đọng (backlog) đạt 184,4 triệu USD, tăng 20 triệu USD so với cuối năm tài chính 2026. Backlog của PMT, GES và Canvys lần lượt đạt 99,4 triệu USD, 43,2 triệu USD và 41,8 triệu USD.
• Dòng tiền từ hoạt động kinh doanh tăng lên 5,9 triệu USD từ mức 1,4 triệu USD, trong khi dòng tiền tự do đạt 4,2 triệu USD. Công ty kết thúc quý với 36,9 triệu USD tiền mặt và không có nợ tín dụng xoay vòng.
• Ban lãnh đạo kỳ vọng mảng GES sẽ đạt tăng trưởng doanh số ở mức hai chữ số trong năm tài chính 2027, nhờ sự hỗ trợ của các sản phẩm điện gió, hệ thống lưu trữ năng lượng bằng pin và danh mục cơ hội phát triển ngày càng mở rộng.

Kết quả tài chính cốt lõi

Kết quả hoạt động kinh doanh và vận hành

Công nghệ Nguồn và Vi sóng

Doanh số mảng PMT tăng 19,7%, nhờ thiết bị chế tạo phiến bán dẫn (wafer) và các sản phẩm vi sóng và tần số vô tuyến (RF). Nếu không tính mảng chăm sóc sức khỏe truyền thống, PMT đã tạo ra 46,6 triệu USD doanh số, tăng 23,1% so với cùng kỳ năm trước.

Tăng trưởng tập trung ở các khách hàng sản xuất phiến bán dẫn cùng các ứng dụng vô tuyến và RF, bao gồm SATCOM (thông tin vệ tinh), radar và thông tin liên lạc quốc phòng. Biên lợi nhuận gộp của PMT tăng lên 35,4% từ 31,3%, phản ánh cơ cấu sản phẩm và khoản hoàn thuế.

Ban lãnh đạo cho biết các khách hàng bán dẫn vẫn tích cực về nhu cầu trong phần còn lại của năm tài chính 2027 và sang năm dương lịch 2027. Richardson Electronics đang tăng ca để đáp ứng nhu cầu cao hơn.

Giải pháp Năng lượng Xanh

Doanh số của GES tăng 2,0 triệu USD, tương đương 27,1%, chủ yếu nhờ các sản phẩm điện gió và các sản phẩm mới hơn như hệ thống lưu trữ năng lượng bằng pin. Biên lợi nhuận gộp cải thiện lên 32,6% từ mức 29,6% nhờ cơ cấu sản phẩm.

Việc áp dụng Mô-đun Năng lượng Pitch đã mở rộng trên nhiều nền tảng tua-bin gió. Công ty đã nhận được các đơn hàng quốc tế từ Brazil, Úc, Pháp và Ý, đồng thời đang phát triển các sản phẩm cho các nền tảng bao gồm Suzlon, Senvion, Nordex và SSB.

Các đợt giao hàng liên quan đến Suzlon đạt khoảng 1,5 triệu USD trong quý 1 năm tài chính. Ban lãnh đạo cho biết sản phẩm của Richardson Electronics dự kiến sẽ trở thành thiết bị tiêu chuẩn trên nền tảng tua-bin SX9 mới của Suzlon, bên cạnh cơ hội bảo trì và thay thế hiện có.

Công ty đã ghi nhận một chương trình lưu trữ năng lượng bằng pin trị giá 2 triệu USD trong quý. Danh mục dự án lưu trữ năng lượng bằng pin của công ty bao gồm gần 50 cơ hội đang hoạt động. Richardson Electronics cũng đã bắt đầu giao hàng theo một dự án trị giá nhiều triệu USD tại Alaska bao gồm 18 hệ thống tùy chỉnh cho 7 cộng đồng vùng sâu vùng xa.

Ban lãnh đạo cho biết chiến lược lưu trữ bằng pin ngày càng tập trung vào các ứng dụng lưới điện nhỏ (microgrid) được thiết kế chuyên biệt. Trong phần Hỏi & Đáp, công ty đã thảo luận về một chương trình tiềm năng với công ty năng lượng ở California gồm 10 đến 20 dự án trong hai năm, với giá trị ước tính khoảng 10 triệu USD, đồng thời lưu ý rằng các hạn chế về bảo mật thông tin khách hàng đã giới hạn việc cung cấp thêm chi tiết.

Canvys

Doanh thu của Canvys tăng 7,9% lên 8,9 triệu USD từ mức 8,3 triệu USD. Tăng trưởng tại Bắc Mỹ đã bù đắp cho doanh thu thấp hơn ở Châu Âu.

Biên lợi nhuận gộp tăng lên 33,0% từ 30,9%, nhờ cơ cấu sản phẩm, năng lực thực thi và khoản hoàn thuế. Backlog cuối quý đạt 41,8 triệu USD, với tỷ lệ đơn đặt hàng trên doanh thu (book-to-bill) là 1,1.

Hoạt động của khách hàng vẫn tập trung vào màn hình hiển thị y tế dùng cho phẫu thuật hỗ trợ bằng robot, định vị và giao diện người - máy, cũng như các ứng dụng công nghiệp như thông tin hành khách, thiết bị in ấn, bán hàng tự động, phay và đóng gói.

Triển vọng từ ban lãnh đạo

Ban lãnh đạo kỳ vọng mảng GES sẽ tạo ra mức tăng trưởng doanh số hai chữ số trong năm tài chính 2027, nhờ hỗ trợ từ lượng backlog ngày càng mở rộng, các sản phẩm điện gió và danh mục dự án lưu trữ năng lượng bằng pin.

Đối với PMT và GES, ban lãnh đạo ước tính khoảng 75% lượng backlog hiện tại dự kiến sẽ được giao trong năm tài chính 2027. Công ty cũng kỳ vọng backlog tiếp tục tăng trưởng dựa trên các sản phẩm mới, báo giá và việc bổ sung khách hàng mới.

Canvys kỳ vọng hầu hết lượng backlog của mảng này sẽ được giao trong năm tài chính, mặc dù một số hợp đồng khung kéo dài từ 2 đến 3 năm. Thời điểm giao hàng vẫn phụ thuộc vào các chương trình khách hàng riêng lẻ.

Richardson Electronics tiếp tục duy trì trọng tâm vào đầu tư tự thân và tăng trưởng có lợi nhuận. Hội đồng quản trị đã tuyên bố cổ tức bằng tiền mặt hàng quý là 0,06 USD trên mỗi cổ phiếu phổ thông, trả vào quý 2 năm tài chính 2027.

Rủi ro và các yếu tố cần theo dõi

• Mức lợi ích 170 điểm cơ bản từ hoàn thuế đã hỗ trợ đáng kể cho biên lợi nhuận gộp quý 1 năm tài chính. Ban lãnh đạo không thể đưa ra dự báo rõ ràng về thời điểm hoặc quy mô của các khoản hoàn thuế trong tương lai và chỉ ra rằng các lợi ích tương tự có thể không lặp lại ở cùng mức độ.
• Chính sách thương mại, thuế quan, diễn biến địa chính trị, logistics và các điều kiện kinh tế toàn cầu tiếp tục tạo ra yếu tố không chắc chắn.
• Mảng Canvys và một số chương trình của GES hoạt động theo dự án, khiến doanh thu và thời điểm giao hàng biến động giữa các quý.
• Lãi suất cao hơn có thể ảnh hưởng đến các khách hàng thâm dụng vốn vốn phụ thuộc vào vay nợ, mặc dù bản thân Richardson Electronics không có nợ tín dụng xoay vòng vào cuối quý.
• Hàng tồn kho vẫn ở mức cao khoảng 103,3 triệu USD do công ty cân bằng kỷ luật vốn lưu động với các yêu cầu từ khách hàng mảng bán dẫn, điện gió và các mảng khác.

Nội dung nổi bật phần Hỏi & Đáp với chuyên viên phân tích

• Chuyển đổi backlog: Ban lãnh đạo ước tính khoảng 75% lượng backlog của PMT và GES sẽ được giao trong năm tài chính 2027. Hầu hết lượng backlog của Canvys cũng dự kiến sẽ được giao trong năm, mặc dù một số hợp đồng kéo dài nhiều năm.
• Cơ cấu doanh thu GES: Ban lãnh đạo cho biết phần lớn mức tăng trưởng của bộ phận đến từ mảng điện gió và các sản phẩm liên quan. Công ty phục vụ hơn 23 khách hàng với hơn 10 sản phẩm dành cho các nền tảng tua-bin gió.
• Cơ hội thị trường điện gió: Richardson Electronics cho biết mức độ thâm nhập của công ty đối với các tua-bin gió của GE tại Mỹ vẫn ở dưới mức 20%, tạo dư địa cho tăng trưởng thị phần tiếp theo. Việc nâng cấp (repowering) các tua-bin cũ hơn cũng có thể hỗ trợ cầu đối với Mô-đun Năng lượng Pitch.
• Lưu trữ bằng pin: Ban lãnh đạo nhấn mạnh các lưới điện nhỏ (microgrid) tùy chỉnh là một thị trường ngách cốt lõi, dẫn chứng về việc triển khai tại Alaska, danh mục dự án với gần 50 cơ hội và chương trình triển vọng tại California.
• Đầu máy xe lửa chạy điện và diesel: Công ty vẫn tích cực trong các mô-đun khởi động và phát triển IGBT. Ban lãnh đạo cho biết các mô-đun khởi động tạo ra biên lợi nhuận xoay quanh mức trung bình của công ty nhưng từ chối tiết lộ đơn giá.

Toàn văn Biên bản Cuộc họp Báo cáo Kết quả Kinh doanh

Toàn văn cuộc gọi công bố kết quả kinh doanh

Phần trình bày của ban lãnh đạo

Operator

Good day and thank you for standing by. Welcome to the Richardson Electronics earnings call for the first quarter of fiscal year 2027. This time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press star 1-1 on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star 1-1 again.

Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Edward Richardson, Chairman of the Board and CEO. Please go ahead.

Edward Richardson

Good morning and thank you for joining Richardson Electronics fiscal 2027 first quarter conference call. We appreciate your continued support and interest in our company. Joining me today are Robert Ben, Chief Financial Officer, Wendy Diddell, Chief Operating Officer, Gregory Peloquin, General Manager of our Power and Microwave Technologies and Green Energy Solutions Groups, and Jens Ruppert, General Manager of Canvys. As a reminder, this call is being recorded and will be available for playback. Before we begin, I would like to remind everyone that we will be making forward-looking statements. These statements are based on current expectations and involve risks and uncertainties. Actual results may differ materially from those discussed today. Please refer to our press release and SEC filings for discussion of risk factors.

I am pleased to report that we started fiscal 2027 with a strong first quarter. Higher than expected sales growth and expanded gross margin drove a 5x year-over-year improvement in operating income to $5.1 million, or 7.9% of sales. Improved profitability and proactive working capital management generated $5.9 million of cash operating activities compared with $1.4 million in the prior year first quarter. Backlog grew to $184.4 million, up $20 million from fiscal year 2026 year-end. While Robert will review the financial results in detail, the broader takeaways are strong execution across our global teams, growing adoption of key product lines, and positive momentum in our strategic growth priorities.

Our performance was led by continuous strength in our Power and Microwave Technologies, particularly in semiconductor wafer fabrication equipment, RF and microwave components, and engineered solutions. Demand remains healthy across key end markets, including semiconductor manufacturing, defense, communications infrastructure, and industrial applications. This growth reflects favorable market conditions and our multi-year efforts to broaden our customer base, expand technology partnerships, and strengthen our engineering capabilities. We also continue to make progress in Green Energy Solutions. Interest in power management, energy resiliency, and energy storage has strengthened as industrial, commercial, and infrastructure customers seek greater reliability, lower operating costs, and solutions for growing power requirements. We believe these long-term trends support our strategy and create attractive opportunities for Richardson Electronics.

At Canvys, customer engagement remains active across medical and industrial markets. Although project timing can create quarterly variability, customer activity, requests for quote volume, and opportunities for new design wins remain encouraging. Continue to support customers with highly engineered display solutions differentiated by customization quality and long-term support. Strategically, we are seeing increased customer interest in our U.S.-based engineering and manufacturing capabilities. Our Made in America initiative, engineering expertise, global infrastructure, manufacturing footprint, and strong balance sheet are creating opportunities in aerospace, defense, power management, and industrial applications. We expect this trend to remain favorable as customers evaluate supply chain continuity, localization, and tariff exposure in sourcing decisions.

The macro environment remains uncertain with trade policies, tariffs, geopolitical developments, energy markets, and global economic conditions creating challenges across industries. However, the underlying demand drivers supporting our business remain strong, and we continue to focus on what we can control. Expansion of AI-related infrastructure, semiconductor investment, power systems modernization, defense spending, and demand for energy support markets where Richardson Electronics has recognized capability and customer relationships. We remain disciplined in managing inventory, pricing, operating expenses, and capital allocation. A strong balance sheet and debt-free position provide flexibility to invest in strategic growth while maintaining the financial discipline that has been a hallmark of the company for 80 years. Overall, we believe the company is well positioned as we move through fiscal 2027. We remain focused on growing higher value engineered solutions, improving profitability, supporting customers, and creating long-term shareholder value. Thank you. With that, I will turn the call over to Robert Ben for a detailed review of the quarter's financial results.

Robert Ben

Thank you, Edward, and good morning. I will review our financial results for our first quarter of fiscal 2027, followed by a review of our cash position. Consolidated net sales increased 18.9% to $64.9 million compared to net sales of $54.6 million in the prior year's first quarter. This was our ninth consecutive quarterly year-over-year increase in sales. The first quarter was led by a 19.7% increase in PMT sales, driven by strong growth in semiconductor wafer fab and RF and microwave products. GES sales increased $2.0 million, or 27.1%, as a result of higher sales of wind products and new products, including battery energy storage systems. Canvys sales increased 7.9%, reflecting higher sales in North America.

Consolidated gross margin for the quarter was 34.6% of net sales compared to 31.0% during the first quarter of fiscal 2026. In the first quarter of fiscal 2027, gross margin benefited by 170 basis points due to an IEEPA tariff refund. PMT gross margin increased to 35.4% compared to 31.3% as a result of product mix and the IEEPA tariff refund. GES gross margin increased to 32.6% from 29.6% due to product mix that included new products. Canvys gross margin increased to 33.0% from 30.9%, primarily due to the IEEPA tariff refund. Operating expenses were $17.4 million compared to $16.0 million in the first quarter of fiscal 2026. The increase in operating expenses resulted primarily from higher employee compensation expenses, including incentives driven by the strong sales growth, and higher travel expenses.

As a percentage of net sales, operating expenses improved to 26.8% in the first quarter of fiscal 2027 versus 29.2% in the prior year's first quarter. Operating income increased over 400% to $5.1 million compared to an operating income of $1.0 million in the prior year's first quarter. Net income was $4.1 million for the first quarter of fiscal 2027 compared to net income of $1.9 million for the first quarter of fiscal 2026. Earnings per common share diluted were $0.27 in the first quarter of fiscal 2027 compared to earnings per common share diluted of $0.13 in the first quarter of fiscal 2026. EBITDA was $6.0 million for the first quarter of fiscal 2027 versus $3.3 million in the first quarter of fiscal 2026. Please note that EBITDA is a non-GAAP financial measure, and a reconciliation of the non-GAAP item to the comparable GAAP measure is available in our first quarter fiscal 2027 press release that was issued yesterday after the market closed.

Turning to a review of our cash position. Cash and cash equivalents at the end of the first quarter of fiscal 2027 were $36.9 million compared to $31.8 million at the end of fiscal 2026. The increase in cash and cash equivalents related to net income adjusted for non-cash items and higher accounts payable, partially offset by higher accounts receivable. Capital expenditures of $1.7 million in the first quarter of fiscal 2027 were primarily related to facilities improvements in IT systems versus $1.0 million in the first quarter of fiscal 2026. Free cash flow was $4.2 million for the first quarter of fiscal 2027. We paid $0.9 million during the quarter for cash dividends. In addition, based on our current financial position, our Board of Directors declared a quarterly cash dividend of $0.06 per common share, which will be paid in the second quarter of fiscal 2027. As of the end of the first quarter of fiscal 2027, the company had no outstanding debt on its revolving line of credit with PNC Bank. Now I will turn the call over to Gregory, who will provide more details for our PMT and GES business groups.

Gregory Peloquin

Thank you, Robert, and good morning, everyone. We are excited by the continued progress we are making in both bookings and billings as a result of our multi-year growth strategies underway for GES and PMT. Into FY '27 key strategic imperatives include developing a stronger backlog, launching new products, expanding our customer base, and advancing multiple development programs from beta testing to pre-production. I am pleased to report that we are making excellent progress towards our goals in Q1 FY '27. Starting with GES, our year-over-year sales growth and bookings trends are encouraging as we continue to grow the pipeline of opportunities through both current and new technology partners, as well as engineered solutions developed by our field engineers and design team. GES sales in the quarter grew 27.1% year over year, as more customers adopted our key products across a broader set of applications.

Within GES, we saw continued progress across key growth opportunities. First, we experienced growth adoption of our Pitch Energy Modules across multiple wind turbine platforms. We served dozens of wind turbine owners and operators, including exclusive partnerships with the top four owner-operators of GE wind turbines, as RWE, Inber Energy, Enel, and Nextera. We also saw growth from our multi-brand PEM Turbine Platforms. We continue to grow this program internationally, expanding into Europe, Asia, with new products for other turbine platforms including Suzlon, Senvion, Nordex, and SSB. We have now received orders outside of North America from customers in Brazil, Australia, France, and Italy, adding to our strong rollout in North America. Second, we booked a $2 million BEST program in Q1. This milestone highlights the accelerating momentum of our BEST strategy, supported by a growing pipeline of nearly 50 active opportunities as of today. We expect new partnerships under development will expand our depth of product offering and customer reach in the future.

We believe our competitive advantage in BEST is rooted in our ability to deliver highly engineered custom solutions for unique applications. That capability is supported by years of engineering and manufacturing expertise in niche power management products and markets, differentiating ourselves and technology partners, a U.S.-based footprint and a nearly 80-year corporate history and a strong balance sheet. Together, these strengths allow us to work closely with customers to design battery energy storage systems tailored to their specific performance, operating, and application requirements. We believe our approach and platform differentiate us from emerging and more standardized off-the-shelf solutions. Today, our pipeline includes niche commercial and industrial applications throughout North America, and we believe there are many opportunities to increase our pipeline throughout FY '27 and beyond. We are also focused on converting this growing pipeline into sales, with multiple opportunities expected to close in FY '27. Our overall GES growth strategy remains centered on power management.

We have rapidly designed multiple products, secured patents, and built a strong global customer base and technology partners. Our success is evident in our growing sales pipeline as we capitalize on numerous growth opportunities tied to an evolving power management requirements and significant energy transformation initiatives. With these programs, testing and deployment continue to progress well with our key customers. We expect continued sales growth coupled with our growing backlog to produce double-digit growth for GES in FY '27. Turning to the PMT, excluding the legacy healthcare business, sales were $46.6 million in the quarter, a 23.1% increase over the prior year's first quarter. This reflects strong growth for both our semiconductor wafer fab customers as well as our RF and wireless component product line, specifically in SATCOM, radar, and defense communication markets. This continued growth trend in Q1 allowed us to expand sales at a double-digit rate with strong growth and backlog.

We are excited about the positive feedback from our Semi-Fab customers who are expressing ongoing optimism and continued growth well into calendar year 2027. We continue to invest in our infrastructure, including our LaFox-based BEST demo center, while also expanding our design and field engineering teams and enhancing our manufacturing capabilities to support growing demand and innovation. Our field engineering team continues to identify new customers and opportunities across our global end markets. We continue to gain market share by developing new products and solutions that are accepted by our customers. In summary, we are encouraged by the success so far of our strategic initiatives underway across PMT and GES, including our new BEST program, global expansion of our key engineered solutions products, and new technology partnerships. Our global capabilities and global go-to-market strategy continue to separate us from our competition in power management, RF and microwave, and green energy markets. By combining legacy products and new technology partners and engineered solutions, we believe we are well positioned to deliver continued sales growth. We believe positive momentum has continued as we enter Q2 in the second half of FY '27. With the expanding backlog, compelling new products, growing market share, and strong cross-controls, we believe FY '27 will be another strong year for growth in sales and profits for both GES and PMT. And with that, I will turn it over to Jens to discuss Canvys.

Gregory Peloquin

to see the future in our fiscal year 2027. Jens, do you want to take Canvys?

Jens Ruppert

Thanks, Gregory, and good morning, everyone. Canvys designs, engineers, manufacturers, and sells custom display solutions to Original Equipment Manufacturers across global medical and industrial markets. Our mission is to deliver high-quality application-specific display solutions that meet demanding customer requirements and support long product life cycles. Canvys reported first quarter fiscal 2027 revenue of $8.9 million, an increase of 7.9% compared with $8.3 million in the first quarter of fiscal 2026. Our business remains project-based and can vary from quarter to quarter based on timing of customer programs and shipments. Gross margin was 33.0% of net sales in the first quarter, compared with 30.9% in the same quarter last year. The year-over-year improvement reflected a more favorable overall product mix and disciplined execution, despite continued variability in freight, duties, tariffs, and other supply chain costs.

Regional performance was mixed with lower year-over-year revenue in Europe, offset by growth in North America. This highlights the value of our diversified customer base while reflecting regional differences in customer demand and program timing. The quarter unfolded in a resilient but uneven global economy. Tariffs, trade policy changes, logistics conditions, and customer scheduling continue to create uncertainty. We remain focused on disciplined execution, customer collaboration, and supply chain flexibility to support customers' requirements and protect program continuity. During the quarter, Canvys continued to pursue opportunities with both repeat and new medical OEM customers across robotic-assisted surgery, navigation, and human-machine interface applications for medical devices. Our solutions also continue to support commercial and industrial applications, including passenger information systems for trains and buses, and HMI technologies used in printing, vending, milling, and packaging equipment.

Our commercial initiatives remain centered on increasing Canvys' visibility and market leadership, developing new opportunities, deepening strategic customer relationships, and converting our pipeline into additional design wins and production programs. We are also continuing to strengthen supply chain flexibility and operational execution, so that we can respond effectively as customers demand patterns and trade conditions evolve. At the end of the first quarter, backlog was $41.8 million, with a book-to-bill ratio of 1.1. These measures provide important visibility into future demand, although the timing of individual programs can cause quarterly fluctuations. Looking ahead, we expect customer investment decisions and production schedules to continue varying by market and program. We remain encouraged by customer engagement, request for quote activity, and our opportunity pipeline. With our improved first quarter profitability, disciplined execution, and continued focus on design wins, we believe Canvys is well positioned to support sustainable growth and create long-term shareholder value. I will now turn the call over to Wendy.

Wendy Diddell

Thanks, Jens, and good morning, everyone. As we have discussed previously, our corporate strategy remains centered on two key priorities: accelerating profitable growth, and improving efficiency. The first quarter's results show strong progress on both fronts. Customer activity and backlog continue to support our growth priorities. At the end of the quarter, PMT and GES backlog increased meaningfully from fiscal year-end, reflecting continued demand across semiconductor, power management, wind, and other engineered solution markets. We continue to view backlog as an indicator of demand and future visibility, while recognizing that shipment timing depends on product mix, customer schedules, supply, and program milestones. We also continue to focus on efficiency and cash generation. Inventory was approximately $103.3 million, essentially flat to FY '26 year-end, as we balanced inventory discipline with the need to support semiconductor, wind, and other customer programs.

Our focus remains on converting inventory and backlog into revenue and cash, improving manufacturing absorption, and directing resources toward the programs that best position us for growth and improved profitability. We also continue to manage sourcing, pricing, operating expenses, and capital commitments carefully. During the fourth quarter, we completed our initial AI readiness and opportunity assessment. In the first quarter, our emphasis shifted from identifying areas to implementing practical use cases and establishing a process for measuring results. We are focused on business outcomes, including reduced manual work, shorter cycle times, better consistency, and improved visibility in business processes. Our use sales, supply chain, manufacturing and engineering, finance, and administrative workflows, with governance and security controls built into the process. We also continue to advance our Made in America strategy, where our U.S.-based engineering, manufacturing, testing, and quality capabilities can help customers address localization, tariffs, supply chain continuity, and speed to market. During the quarter, sales activity continued across aerospace, defense, industrial, semiconductor, and power management applications. Our LaFox operation continues to provide us with the ability to support customers from design and sample builds through production and tests.

We are seeing increased interest in programs that require the combination of technical support and domestic manufacturing capabilities. Our solid relationships with rail and wind customers are a strong testament to our Made in America strategy, as is our growing relationships with companies like C-Motive, Kiva, and Goshen. We are also working on a new program involving ultracapacitor racks. Our ultracapacitor-based energy storage platform delivers a fully integrated solution designed specifically for the demanding requirements of data centers. By combining power conversion and energy storage into a single cohesive system, we eliminate the complexity of multi-vendor architectures and deliver a streamlined high-performance backup solution. We started with contract manufacturing quotes and then continued conversations with our own products. Our previous engineering work on other programs offered a fundamental building block.

We are now looking to make these racks a standard offering to support smaller battery energy storage installs. Our capital allocation priorities remain focused on organic growth. Battery energy storage is becoming an increasingly important part of our growth strategy. During the quarter, our pipeline continued to grow across commercial, industrial, utility, and data center applications where customers need resiliency, energy management flexibility, and engineered solutions. We began shipments for our first Alaska order, a multi-million dollar project that includes 18 customized battery energy storage systems serving seven remote communities. This project is an important early reference point as we continue to pursue additional opportunities where reliability, customization, and technical expertise are critical. We have also started the build-out of our energy storage demonstration center at our LaFox headquarters.

In addition, we continue to advance our partnership with Goshen, a leading manufacturer of lithium-ion batteries and battery energy storage systems. We have expanded our REST product family during the quarter with the introduction of the REST 211 and REST 422 systems. Together with the REST 760 and the REST 1505 platforms, these additions broaden our ability to serve a wider range of commercial and industrial energy storage applications. Taken together, these activities demonstrate the progress we are making as our emerging battery energy storage strategy moves from development into commercial adoption and scale. In wind and power management, demand remains supported by the global install base of wind turbines, the need for reliability and life extension solutions, and our expanding portfolio of related products. We have shipped more than 90,000 units since we launched the first product. As Gregory mentioned, we also continue to make progress with geographic expansion, including the ongoing Suzlon rollout and continuing new customer testing in Europe. Margins on these products is accretive to the company's overall margin, further supporting our profitable growth strategies. Semiconductor demand also remained an important growth driver during the quarter. Key customers have indicated continuing activity into calendar 2027. We are expanding capacity via additional shifts to support higher levels of demand. Overall, the first quarter represented a strong start to our fiscal 2027. We delivered strong sales growth, improved operating performance, increased cash, and continued to advance the strategic initiatives that support our long-term plan. With that, I will turn it back to Edward.

Edward Richardson

Thanks, Wendy. In closing, our first quarter performance reinforces our progress against multi-year strategy. The comments from Robert, Gregory, Jens, and Wendy reflect solid execution across the organization and continued momentum in our chosen markets and programs. I am very proud of the Richardson team. Our priorities remain clear: execute for customers, improve profitability, manage capital with discipline, and convert our strategic initiatives into sustainable growth and long-term value for shareholders, customers, and employees. We will now open the call for questions.

Operator

As a reminder, to ask a question, please press star 1-1 on your telephone and wait for your name to be announced. To withdraw your question, please press star 1-1 again. Ladies and gentlemen, due to time constraints, we ask that you please limit yourself to one question and one follow-up. Again, we ask that you please limit yourself to one question and a follow-up until all have had a chance to ask a question. After which, we will answer additional questions from you as time permits. Please stand by while we compile the Q&A roster. Our first question comes from Keaton Shoki with Northland Capital Markets. Your line is open.

Unknown Speaker

Hi, this is Keaton Shoki on for Bobby. Congrats on the quarter. My first question is on backlog. We saw it grow another 12% sequentially. And I was curious if we could get a sense of visibility for backlog converting to revenues over the next 12 months. And then as you look at your pipeline for new orders, what are your expectations for backlog growth through year-end?

Gregory Peloquin

I will speak to PMT and GES. Our current backlog, I would estimate that, analyst, probably about 75% of the backlog is scheduled to ship in the quarter, I am sorry, the fiscal year. That is continued backlog growth in Q2. And based on the number of new products, number of quotes, number of new customers, we feel that we are going to have strong top-line growth and continued growth in backlog.

Jens Ruppert

Sure. Sure. I am happy to address Canvys. Yeah. So our backlog, you know, we have a lot of orders. They go out like 2 years, 3 years, but we are expecting orders coming in like every quarter. So it is really hard to say. The majority of the backlog will ship also within the fiscal year. But again, you know, some of the orders we have like frame contracts, they carry out for 2 years or even longer.

Unknown Speaker

Okay, thank you for the color on that. And then on the IEEPA tariff refunds, what are your expectations for refunds going forward? Have those most of them worked through? Should we expect the benefit to continue in the next quarter?

Robert Ben

Hi, this is Robert Ben. Unfortunately, it is really hard to answer that question. You know, we are getting these refunds sporadically and they do not even really tell us what exactly, you know, time periods they relate to. So I wish I could give you more specific information, but unfortunately, I do not have that to give.

Unknown Speaker

I do not think we expect to receive that much.

Unknown Speaker

Okay, okay, that is helpful. And then can you help me understand the revenue mix within GES? How much of that growth was specifically from the wind ultracapacitors versus the BEST and other new products?

Gregory Peloquin

Yes, the majority of it was in the wind and associated products. As you have seen over the last four calls, we currently have seen or continue to have over 23 customers that are using our product, and we have over 10 different products that we are selling into the wind turbine platforms today that, uh, you know, where they are obviously, we started the group, so that is the majority of it on the wind side.

Unknown Speaker

And then, okay, thank you. I will return to the queue.

Operator

Thank you. As a reminder, please press star 1-1 to ask a question. Our next question comes from Anja Marie Soderstrom with Sidoti. Your line is open.

Phần hỏi đáp

Anja Soderstrom

Hi, thank you for taking my questions. Congratulations on the great quarter. Hi, Wendy and everyone. Just curious, with a backlog, how much of that is FS 40 40 43?

Gregory Peloquin

$43.2 million for GES, $99.4 million for PMT.

Anja Soderstrom

Okay, and then within PMT, how much of that revenue is from the semiconductor wafer fab, and what do you see in terms of revenue? Is that growing sequentially? What is your visibility for the second quarter there?

Gregory Peloquin

I do not know if we could say what that is for backlog, but the forecast, the input from the customer base. We have numerous customers in the Semi-Fab Space. They look at this type of growth that we are seeing in Q1 to continue well into definitely the rest of our fiscal year 2027, but even into farther for calendar year 2027. Very positive feedback from the customers.

Anja Soderstrom

Okay, thank you. And then within the Suzlon opportunity, that is really in its early innings, what kind of opportunities do you see there? How big can that be? Yes, I thought she said Suzlon. Suzlon. S-U-Z-L-O-N. Suzlon, yes. Yes.

Gregory Peloquin

The Suzlon platform, is that what you said? Yes. Suzlon, you said. Yes. So we had a very strong shipments in Q1 for Suzlon, for the, you know, replacement business of their lead acid batteries. It was, I think, about $1.5 million. But the good news there is we are working on their new platform for their new turbines called the SX9, and we have been confirmed our product will be installed on an OEM point of view versus the MRO. So we will have both the MRO business worldwide on all Suzlon turbines, but then we will also be standard equipment, if you will, on their new platforms as they introduce new turbines. So it has been a very good relationship. It has been a long one, a lot of work, but like Richardson's DNA, we have done every sort of unique need that they had for that product to work in their turbine over what is going on in about 2 years. So a very good example of Richardson's capabilities there, for sure.

Anja Soderstrom

Okay, thank you. And just one last one for me. How do you anticipate the high interest rates to affect?

Robert Ben

Well, first of all, we do not have any debt, as you know. You know, there really is not any impact there. Were you thinking something more specific?

Anja Soderstrom

Yes, I know. I do not expect it to affect you directly, but it might affect your customers' demand, I would assume, given they are so capital-intense.

Gregory Peloquin

Yeah, I, you know, maybe Gregory can speak to the wind customers. Yeah, the interest rates obviously will affect anyone borrowing money. But what we have seen is in a positive and negative, in that this administration has greatly reduced the subsidies and grants that they get for putting in new wind turbines or even new solar, which falls well for us because what people are doing, and we did see a huge increase with one of our largest, I call them the four sisters, and we mentioned them in our presentation notes, they repower. So they take apart the turbine and just rebuild it with all new products to make it last for another 10 to 15 years. And our ultracapacitor or Pitch Energy Modules work perfect for that. Because once they do the repower, that would be the last time they have to put a battery in the turbine. So in a way, the best way to do that to us is the reduction in grants and subsidies in terms of interest rates and, you know, people borrowing money. I do not know if it has a direct effect on our business, but anyone that has to borrow money to do that, it would.

Anja Soderstrom

Okay, thank you. That was all for me.

Operator

Thanks, Anja. Our next question comes from Ross Taylor with ARS Investment Partners. Your line is open.

Unknown Speaker

Thank you and congratulations. How are you doing? Good. Good quarter. I wanted to ask you guys more of a philosophical question. We have often, Wendy, had discussions about, you know, the desire to build kind of repeat business and, you know, a lot of what Richardson is expert at is things that are limited runs, smaller runs. Are you guys making or do you see progress and opportunity to have business that really becomes more repeat so we can basically, you know, effectively build a core business that covers the operating costs and makes a reasonable return, you know, over the next few years?

Wendy Diddell

Certainly that is true. I will jump in first and other people can add to it. Certainly that is true of our tube business. The tube business is, you know, EDG is MRO and that is very much repeat business, long-term repeat business, very steady business.

Gregory Peloquin

Yes, and so you have that base business that is very consistent, very measurable. And then, you know, we have to pick opportunities that we can win at. And we have found so far that these opportunities are very niche, very unique. And so they are not really what I will call consumer goods at all. And there is so much project-based. So, you know, we have seen over time that the Pitch Energy Module business somewhat getting more and more consistent each quarter. We will get a large order, you know, every so the quarter that is starting to get consistent, but it is project-based. Most of these other programs that we are working on. And so we are going to see, you know, large bookings and then booking slowed down a little bit as we build and ship the product to these one-year contracts for backlog. So, you know, really, we do not look for, we look at opportunities where we can win at. And over time, for a good example, the Pitch Energy Modules were project-based, but we have now added, you know, almost a dozen new products in that so we can kind of get a more steady stream of revenue, with the customers we have today as opposed to just the repower, which, you know, the three-month program.

Wendy Diddell

Or a six-month program. Plus, in those markets that we serve that Gregory just mentioned, our market share is still fairly low. We have a lot of runway left to, you know, expand our penetration when you look at, for example, the GE wind turbines in the United States, you know, we are not even at that 20% level. So we have a long way to go, Ross.

Unknown Speaker

Continue to sell these units. Okay, so basically with that what I am hearing you say is on those areas you can, you will basically be able to get both market share growth and then over time, you will that will basically become a recycling business where perhaps every 10 years or so customers might need to replace the module and you will be able to pick up that as a cash flow business. Yes. Yeah. Can you answer, I am going to slide two questions into one, which is talk about the opportunities in both battery storage and also we saw, um, you know, a competitive or competitor in the electric locomotive space makes them deliver some engines, I think, down into L.A. or further, I think, the Union Pacific Yard. Can you talk about where you guys stand, how you see the electric opportunity but like locomotive opportunity? Yes, so right now we are still very.

Gregory Peloquin

We are very active in electric locomotives and diesel locomotives. As you know, we have large programs for starter modules, working on an IGBT module for locomotive management. So, we are still hearing from our customers, and we have finished the large order for Burlington Northern Santa Fe that they expect that they will be building and getting more contracts for electric locomotives. So we are just waiting on them. We do not have a lot of input on that for the electric locomotives part. What was the other question? The other part was the, and we are happy to have you on the electric motor, the.

Unknown Speaker

Electric locomotives. Can you talk about the economics in the starter modules as well and compare those to the electric locomotives themselves? What do we look at on a unit basis? Oh, I mean, in terms of cost and resale? Yes, what you sell it for and does it carry kind of corporate average margins, better or worse?

Gregory Peloquin

Yeah, I mean, we make strong margins, corporate average margins on the starter modules. It is obviously a much smaller number within the diesel locomotive itself, but it is good margin, we have a niche, and we can expand that technology and other products that we are working on. But, you know, it does not offset the, you know, electric locomotive modules that we make and have installed today.

Unknown Speaker

What is the cost of a starter module for a diesel? Yes, I am not going to share that. I have got too many customers and competitors looking.

Gregory Peloquin

And competitors listening.

Unknown Speaker

Give them the family discount. They know that. All right. Okay, and then the battery storage space.

Gregory Peloquin

Yes, we really, and it has been confirmed by customers, by integrators, by industry people, this microgrid system, growth. That is what the current order is with BOX in Alaska. There are small microgrids in seven different towns on a federal property. The next one that we will be coming up with is for a large energy company in California, due to NDAs, I cannot give you the name, but I am sure you can figure it out, Ross. And we will be receiving an order to support them with the battery, hence the container. Somebody else will be putting in the whole infrastructure and the build-out of these microgrids. About 10 to 20 different projects that we will be supporting this company on over the next 2 years. It will be about $10 million. The products we work on, because there are too many people involved and companies involved and margins lower on these huge data centers. These microgrids really fit a niche that we are doing. Our product seems to fit that. Our engineering and value-added capabilities allow us to take a product and design it to that really specific site of anything between 200 kilohertz and 5 megawatts. And we are just seeing so many opportunities for that. And with our relationship with our technology partners, our own internal engineering capabilities, to be honest with you, we are winning more than I thought. It has really defined our strategy. We thought it would work and so far it has. Obviously, you can see with the bookings and shipments in a very short amount of time, and the funnel continues to grow.

Unknown Speaker

Yes, it is a real exciting opportunity for you guys. Okay, thank you very much. I will jump back.

Gregory Peloquin

Thank you. Thanks, Ross.

Operator

As a reminder, please press star 1-1 to ask a question. I am showing no further questions at this time.

Edward Richardson

I would like to turn it back to Edward Richardson for closing remarks. Thanks again for joining us today and for your questions during the Q&A portion of the call. We appreciate your continued interest in Richardson Electronics and we look forward to speaking with you again in the next quarter. Until then, please feel free to call us at any time. We are happy to answer your questions.

Operator

This concludes today's conference. Thank you for participating. You may now disconnect.

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