Q1 2025 Richardson Electronics Ltd Earnings Call

Speaker Change: Good day, and thank you for standing by. Welcome to the Richardson's Electronic Electronics, our name's conference call.

Speaker Change: for the first quarter of fiscal year 2025. At this time, all participants are on a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during this session, you only need press star 11 on your telephone. You will then hear an automated message advising you, your hand is raised. To withdraw your question, please press star 11 again. Please be advised to today's conference is being recorded. I would now like to hand the conference over to your speaker today, Edward Richardson, CEO . Please go ahead.

Ed Richardson: Good morning and thank you all for joining Richardson Electronics Conference Call for the first quarter of fiscal 2025.

Ed Richardson: Joining me today are Bob Ben, Chief Financial Officer, Wendy Diddell, Chief Operating Officer, and General Manager for Richardson Healthcare, Greg Pelacone, General Manager of our Power and Microwave Technology Group, which includes Green Energy Solutions and Jens Ruppert General Manager of Candace.

Ed Richardson: As a reminder, this call is being recorded and will be available for playback.

Ed Richardson: I would also like to remind you that we're making forward-looking statements, they're based on current expectations and involve risks and uncertainties.

Ed Richardson: Therefore, our actual results could be materially different. These refer to our press release and SEC filings for an explanation of our risk factors.

Speaker Change: I'm pleased to report that we had a solid start to fiscal year when net fails exceeding both our internal projections and exceeding our performance from the prior year.

Speaker Change: Q1 sales were 53.7 million, slightly ahead of the 52.6 million we achieved in Q1 last year.

Speaker Change: As a note, Q1 last year benefited from an extra week of sales, making the year over year growth rate even more encouraging.

Speaker Change: Sales expanded in our green energy and health care businesses.

Speaker Change: Reflecting continuous success of our long-term growth strategies, we're particularly pleased to see revenue growth in green energy with sales nearly double what they were in Q1 last year.

Speaker Change: Our cross margin was below the prior year.

Speaker Change: Mainly resulting from the product mix and underabsorption in our factory. We remain committed to retaining our production resources and anticipation of ongoing recovery in the semiconductor-fab equipment market.

Speaker Change: Well, our Q1 sales in this segment remained low. We were up 15% compared with the first quarter last year and backlog is increasing.

Speaker Change: We expect growth in demand throughout the balance of the calendar year 2024 and in the calendar year 2025.

Speaker Change: We also anticipate the launch of several new products in our green energy business and in the first half of the calendar year 2025.

Speaker Change: These activities are expected to drive higher manufacturing demand and improve gross margin.

Speaker Change: If you can see we expect the man and key parts of our business to improve over the coming quarters despite global economic uncertainty.

Speaker Change: This is a direct result of the value we provide our global customers, as well as the multi-year growth strategies we're pursuing to the diversify our business.

Speaker Change: In addition, we believe our strong balance sheet, customer base, and growing engineer solutions will provide the company with flexibility to navigate the current environment and invest in our long-term growth objectives.

Speaker Change: So with this introduction, I'll now turn the call over to Bob Ben, our chief financial officer, to discuss our first quarter financial results and capital position.

Bob Ben: Then Greg, Wendy and Jens were to provide more detail on our business unit performance, including an update on our grocery allergies, new product development, program wins and expanding customer relationships.

Bob Ben: Thank you, Ed, and good morning. I will review our financial results for our first quarter of fiscal year 2025, followed by review of our cash position.

Bob Ben: In addition, please note that I will be discussing EBITDA, a non-gap financial measure. A reconciliation of the non-gap item to the comparable Gap measure is available in our

Bob Ben: Consolidated Nest sales for the first quarter of fiscal 2025, were 53.7 million, compared to Nest sales of 52.6 million and the prior years first quarter, which was a 2.2% increase.

Bob Ben: It is also important to note that the first quarter fiscal 2025 comprises 13 weeks.

Bob Ben: Compared to 14 weeks for the first quarter of fiscal 2024.

Bob Ben: This was our first quarterly year over your increase in sales since the third quarter of fiscal 2023.

Bob Ben: This growth in Nestlale for the first quarter of fiscal 2025 was due to an 84% increase in sales for GES and a 48.7% increase for healthcare.

Bob Ben: Sales growth for the first quarter, fiscal 2025, was partially offset by a 4.3% decrease in PMT sales.

Bob Ben: and a 22.8% decline in cannabis sales.

Bob Ben: Consolidated Gross Margin, for the first quarter, was 30.6% in S-Ails compared to 32.8% during the first quarter of fiscal 2024.

Bob Ben: The largest component of the 220 basis point decline in consolidation gross margin

Bob Ben: was due to our PMT business.

Bob Ben: PMP's gross margin declined to 29.8% from 32.2% as a result of product mix and higher manufacturing under absorption as the company maintains much of its workforce and anticipation of increasing demand for its manufacturing resources.

Bob Ben: Partially off-fetting this decline was higher gross margin at Richardson Health Care in Canvas compared to the prior years for his core.

Bob Ben: Operating expenses is a percentage in net sales where 30% for the first quarter of fiscal 2025 and remain unchanged compared to the first quarter of fiscal 2024.

Bob Ben: Operating income was 0.3 million for the first quarter of fiscal 2025 versus operating income of 1.5 million in the first quarter of last year.

Bob Ben: Income Tax Provision was 0.1 million or an effective tax rate of approximately 9% versus an income tax provision of 0.4 million or an effective tax rate of 23.7% in the prior years

Bob Ben: Net income for the first quarter of fiscal 2025 was 0.6 million, or 4 cents per diluted chair compared to net income of 1.2 million, or 9 cents per diluted chair, and the first quarter of fiscal 2024.

Bob Ben: E.B.D.A. for the first quarter of fiscal 2025 was $1.7 million, or $3.1% of net sales.

Bob Ben: versus 2.6 million or 5.0% of net sales in the prior years first quarter.

Bob Ben: Moving to a review of our cash position.

Bob Ben: Cash and Cash Equivalence at the end of the first quarter, Festival 2025, where 23.0 million, compared to 24.3 million, at the end of the fourth quarter, at Festival 2024.

Bob Ben: Operating Cashflow was 0.4 million compared to 1.0 million in the prior years first quarter.

Bob Ben: This was the second consecutive quarter of a positive operating cash flow.

Bob Ben: Capital expenditures is a 0.9 million in the first quarter of fiscal 2025, we're primarily related to our facilities and IT systems.

Bob Ben: 1.1 million, and the first quarter of 5th year 2024.

Bob Ben: We paid 0.9 million in cash dividends in the first quarter of fiscal year 2025, in addition, based on our current financial position, our board of directors declared a regular quarterly cash dividend of six cents per common share, which will be paid in the second quarter of fiscal 2025.

Bob Ben: As of the end of the first quarter of the still 2025, the company had no outstanding debt, on a 30 million dollar revouting line of credit with PNC bank.

Speaker Change: Now, I will turn the call of the Greg, who will discuss the results for our PMT and GES business groups.

Greg Pelacone: Thank you Bob and good morning, everyone.

Greg Pelacone: We mentioned in our last call that even though our Q4 FY24 results were challenging.

Greg Pelacone: We remain very optimistic about the future, both over the short and long term.

Greg Pelacone: Coming out of Q4 FY24, we had a strong backlog, numerous new product introductions and expanded customer base and development programs transitioning from beta testing to pre-production.

Greg Pelacone: Based on this positive momentum going into FY25, we have pleased to report strong growth in our GES segment and are out of a microwave component business, also quarter over quarter and year over year growth in our wafer fabric equipment manufacturing business in our Q1 FY25 results.

Greg Pelacone: Starting with our GES business, GES grew 84% to 8.1 million dollars.

Greg Pelacone: Looking at these results in more detail, even our margin was down a little bit based on product mix. Our first quarter sales growth benefited from numerous new programs, products and customers.

Greg Pelacone: Many of these have been in development since FY 23 and FY 24 and has a good to see them come due fruition.

Greg Pelacone: We had strong sales in our electric locomotive battery modules and new products for EV and diesel locomotives, such as our starter modules.

Greg Pelacone: In addition, we had a strong growth in our pitch energy modules as we added numerous new customers for our growing portfolio products.

Greg Pelacone: We now serve dozens of wind turbine owners and operators, including inclusive partnerships with the top four owner operators of GE wind turbines such as RWE, Inver Energy, Enal, and next era.

Greg Pelacone: Today, we have sold over 57,000 units in North America, and as I mentioned on the last call, in Q2 FY25, we're expanding into Europe, with GE and other turbine platforms such as Suslan, Sennheon, Nordics and SSB.

Greg Pelacone: RGES growth strategy is still in its early stages.

Greg Pelacone: and as our new products mature, we expect to see sales and booking fluctuate from quarter to quarter. However, I'm pleased with the progress we are making, getting GDS to scale, as we continuously add new customers, products and technology partners.

Greg Pelacone: We expect this trend to continue and contribute to growth throughout FY25 and beyond.

Greg Pelacone: The team continues to excel in identifying customer requirements establishing design and manufacturing capabilities and launching beta-site testing.

Greg Pelacone: In a short amount of time, we have designed numerous products, received several patents, and developed a growing large customer base of global industry leading customers.

Greg Pelacone: The progress will help create more predictable quarterly revenue and booking streams as a GES business gets to scale.

Greg Pelacone: Our customers repeatedly tell us that we have maintained our market share for the core GIS Power Management applications.

Greg Pelacone: Suggesting the slowdown in shipments in FY24 was primarily a timing issue.

Greg Pelacone: In fact, our customer pipeline and opportunities continues to increase as we capitalize on significant energy transformation projects globally, including wind turbine repowering.

Greg Pelacone: Turning to power and microwave technologies or PMT.

Greg Pelacone: which includes the Lifetime Device Group EDG, our legacy tube and semiconductor waferfab equipment business, and the IRF from Microwave Group, or PMG, sales were $34.2 million, down 4.3% compared to the prior year. However, this decline was offset by growth in our IRF from Microwave components business, as well as our semiconductor waferfab equipment business.

Greg Pelacone: TNT margin was down and Q1 due to mainly product mix.

Greg Pelacone: Our combined GES and PMT backlog remain strong and over 97 million dollars.

Greg Pelacone: Given our inventory position, we'll continue to ship many incoming orders from stock as we did in the past fiscal year.

Greg Pelacone: We remain focused on managing our business to support our customers' needs when they are ready.

Greg Pelacone: Having inventory on hand allows us to capture market share and expedite the MPI process or new part of construction process.

Greg Pelacone: We collaborate with our customers and suppliers and use our customers forecast to help us strategically invest in inventory and ensure we meet their needs. Gregory Peloquin was up slightly in Q1 FY25, many due to a large purchase of electronic device tubes to support long-term demand and availability.

Greg Pelacone: A key component of our Ghost Raiders is selectively expanding our global technology partners.

Greg Pelacone: We continue adding new partners who feel technology gaps in our offering and support our growth strategy.

Greg Pelacone: Through these partnerships, we'll often identify opportunities for new products that we design in the manufacturer in-house.

Greg Pelacone: This increase is the value we provide customers and allows us to capture more revenue while expanding and diversifying our customer base.

Greg Pelacone: These long-term supply relationships are extremely strong, and when appropriate, we work with them on strategic purchases to manain proper levels of supply. We negotiate special payment terms, stock adjustment privileges, and shipping schedules to help improve cash flow. In addition, we are a key component of their new product development and new product introduction programs.

Greg Pelacone: We also continue to invest our infrastructure to support our growth. We're bringing on talented design and field engineers and making investments to enhance our design and manufacturing capabilities. A growing in-house design and engineering teams are doing a great job supporting the increased demand in our current products and new product designs.

Greg Pelacone: Our field engineering team continues to identify new customers and opportunities.

Greg Pelacone: With this team, we will continue to identify, develop and introduce new products and technologies for green energy, power management, and order from microwave applications.

Greg Pelacone: Going into Q2FY25, we remain excited about the opportunities with our P&T and GES businesses.

Greg Pelacone: Q1 FY25 bookings exceeded Q1 FY24 by 35%

Greg Pelacone: We did not lose market share in FY24. In fact, with the positive outlook in the semifab market, key customers are forecasting growth in FY25. And our technology partners are continuing to support our unique global business model and drive our business forward.

Greg Pelacone: As of result, we have many reasons to be optimistic about our growth strategies and the future of our business.

Greg Pelacone: I cannot stress enough to value originally trying to unique model to our customers and suppliers.

Greg Pelacone: Our unparalleled capability and global go to market strategy are unique to the power management, IRF and microwave, and green energy markets.

Greg Pelacone: We've done a styrosin model combining legacy products and new technology partners and capabilities that align with our growth strategy to provide global customers with our engineer solutions and capabilities.

Greg Pelacone: This model is unique to the industry in different inches as for my competition.

Greg Pelacone: To our steadfast and creative focus on customers, we continue to excel by capitalizing and up to them as they arise.

Speaker Change: The Executives Member Strategy has never been stronger and it is clear. Our customers and technology partners need Richard Chemlich's products and support more than ever. With that, I'll turn it over to Wendy Diddell to discuss Richard's in healthcare.

Wendy Diddell: Thank you, Greg, and good morning, everyone.

Wendy Diddell: In the first quarter of fiscal year 2025, the healthcare division reported sales of 3.8 million, representing a 48.8% improvement compared to the same quarter last year.

Wendy Diddell: Additionally, this marks a $300,000 or $8.4% increase over the fourth quarter.

Wendy Diddell: All product line showed growth over the prior years first quarter, with a standout 50.6% increase in our CT2 business.

Wendy Diddell: This growth was primarily driven by the repaired Siemens Stratten Z2s and our proprietary altitudes.

Wendy Diddell: The gross margin for the quarter improves to 32.3% up from 31.6% in the same period last year.

Wendy Diddell: This improvement was primarily driven by a favorable product mix, which included higher margin part sales and lower scrap charges.

Wendy Diddell: During the quarter, we maintained steady production of the repair strategy tubes. We fulfilled the backlog carried into the first quarter and sold every tube repair during this period.

Wendy Diddell: Progress continued with our repair program for the Stratton MX MXP and MXP 46.

Wendy Diddell: We remain on track to launch this program later in the fiscal year.

Wendy Diddell: As a result of higher sales and gross margin, we were close to breaking even further quarter. We have significantly reduced our loss compared to the prior year. While our first quarter performance is encouraging, and we remain focused on efforts to improve sales and profitability, the company continues to evaluate strategic options for the healthcare business.

Speaker Change: I will now turn the call over to Jens Ruppert to discuss the results for Canvas.

Jens Ruppert: Thanks for having me and good morning, everyone. Can with engineers, manufacturers and sales custom displays to original equipment manufacturers across global industrial and medical markets?

Jens Ruppert: 10 with Netflix fails to decrease 22.8% to 7.6 million during the first quarter of fiscal 2025. From 9.9 million for the prior year period, due to lower sales in North American and European markets.

Jens Ruppert: We ended the quarter with 38.1 million backlog providing a strong base of business for the future.

Jens Ruppert: across margin as a percentage of net sales increase to 34.3% to the first quarter of 5.2025 from 34.0% for the prior year period, primarily due to an improved product mix.

Jens Ruppert: During the quarter, can be received orders from both repeat and third time medical OEM customers.

Jens Ruppert: Some of these applications include Optical Rense Tomography, OCT, Intervascular Imaging.

Jens Ruppert: Pulse Field Evaluation Computer Radiography in Focrypsy, Caddark Surgery.

Jens Ruppert: Medical Device Control, Radio Therapy, Microwave Applation, and Robotics of the Surgery.

Jens Ruppert: Reasons Design, Successors Illustrator, Commitment, to providing solutions that meet their all the needs of our medical clientele.

Jens Ruppert: Furthermore, they highlight our ability to cultivate and sustain long-term partnerships with both existing and potential customers who require high standards supporting our continuous growth in the spite of sector.

Jens Ruppert: We also provide solutions for numerous commercial and industrial purposes. Our products are used for passenger safety and control rooms, directly within trains and buses. Other applications include human machine interface, HMI for printing, winding and packaging machines.

Jens Ruppert: Given the considerable amount of uncertainties, such as economic difficulties.

Jens Ruppert: Regal Torieships and other near-term trends, we understand that many of our customers have opted for more cautious approach to what new product development and inventory management.

Unknown Executive: Management. We have caused the optimistic that customers demand will see an upturn by early next calendar year. We see positive indicators, and anticipate a steady recovery as the market stabilizes.

Jens Ruppert: We have caused the optimistic that customers demand will see an upturn by early next calendar year.

Jens Ruppert: We see positive indicators and anticipate a steady recovery as the market stabilizes.

Unknown Executive: Support by customer feedback. The important sign is the rights and projects our teams are handling.

Jens Ruppert: Supported by customer feedback.

Jens Ruppert: and the important sign is the rice and projects our teams are handling.

Unknown Executive: Highlighting crows and our markets and acknowledgement of our offerings. Our sales team continues to explore new opportunities.

Jens Ruppert: Highlighting Crosse and our markets and the acknowledgement of our offerings.

Unknown Executive: When I concentrate on implementing our strategic plan to ensure sustainable growth to create long-term value for our shareholders.

Jens Ruppert: Our sales team continues to explore new opportunities, when I concentrate on implementing our strategic plan to ensure sustainable growth to create long-term value for our shareholders.

Unknown Executive: I will now turn the call back over to Ed.

Edward Richardson: Thanks, Jens. While we know Q2 will be challenging, we remain optimistic that Canvas will return the growth given the expanding list of economic conditions. We maintain our excitement and commitment to our long-term growth strategies. The list of opportunities within our green energy solutions business unit continues to expand.

Speaker Change: I will now try to call back over to Ed.

Ed Richardson: Thanks, Jens, while we know Q2 will be challenging, we remain optimistic that Canvas will return to growth given the expanding list of blue chip customers, Canvas servers.

Ed Richardson: Despite uncertain economic conditions, we maintain our excitement and commitment to our long-term growth strategies. The list of opportunities within our green energy solutions business unit continues to expand. Even though product deployment and our customer approvals are taking longer than we'd like, our growing list of global customers for our wind energy transportation and power management sectors support our multi-year growth plan.

Edward Richardson: Even though product deployment and our customer approvals are taking longer than we’d like. Our growing list of global customers for our wind energy transportation and power management sectors supports our growth plan. The demand for energy is only increasing, and a recent McKinsey report forecast demand to increase at an annual rate of 11 to 18 percent through 2050. While fossil fuels will continue to play an important role in creating energy demand, renewable energy sources, particularly solar and wind, will grow at a much faster rate. These trends are aligned with our strategy to support global energy transformation initiatives.

Ed Richardson: The man for energy is only increasing and a recent McKinsey report forecast the man to increase in an annual rate of 11 to 18% through 2050.

Ed Richardson: While fossil fuels will continue to play an important role in meeting energy demand, renewable energy sources, particularly solar and wind, will grow at a much faster rate. These trends are aligned with our strategy to support global energy transformation initiatives, and we intend to leverage our engineered solutions to deliver substantial revenue streams over the coming years.

Edward J. Richardson: And we intend to leverage our engineered solutions to deliver substantial revenue streams over the coming years.

Edward Richardson: As mentioned earlier, backlog from our semiconductor wait for fabrication assemblies is growing. Growth is being driven by rising semiconductor demand was associated with A1. The need for more data centers, 5G deployment, and other factors, including ongoing efforts to localize semiconductor manufacturing. We anticipate the growth and semiconductor wait for to have equipment market will continue over the next several years, giving us time and resources to continue investing and growing our green energy solutions business. We continue to take a conservative approach to expenses. That was we remain focused on managing inventory levels and are committed to maintaining a healthy balance sheet.

Ed Richardson: As mentioned earlier, backlog from our semiconductor wafer fabrication assemblies is growing. Growth is being driven by rising semiconductor demand was associated with A1, the need for more data centers, 5G deployment, and other factors including ongoing efforts to localize semiconductor manufacturing.

Ed Richardson: We anticipate the growth and semiconductor way for to have equipment market will continue over the next several years, giving us time and resources to continue investing and growing our Green Energy Solutions business.

Ed Richardson: We continue to take a conservative approach to expenses that would suit remain focused on managing inventory levels and are committed to maintaining a healthy balance sheet.

Edward Richardson: We believe these initiatives will help generate operating leverage as sales expand. Our focus for the remainder of the fiscal year is to continue the positive momentum. We remain optimistic about the opportunities in our pipeline, and we are committed to delivering continued value to our shareholders.

Ed Richardson: We believe these initiatives will help generate operating leverage as fails expand. Our focus for the remainder of the fiscal year is to continue the positive momentum. We remain optimistic about the opportunities in our pipeline and we are committed to delivering continued value to our shareholders.

Edward Richardson: On behalf of everyone at Richardson Electronics, we look forward to updating you on the progress we're making. We'll be happy to answer any of your questions. Thank you.

Ed Richardson: On behalf of everyone at Richardson Electronics, we look forward to updating you on the progress we're making. We'll be happy to answer any of your questions.

Unknown Executive: As a reminder to ask a question at this time, please press star 1-1 on your telephone and wait for your name to be announced. Ladies and gentlemen, due to the time constraints, we do 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 one follow-up. Until we have answered all questions, after which we will answer additional questions if time permits. One moment for our first question. And our first question is going to come from the line of Bobby Brooks with Northland. Your line is open, please go ahead.

Speaker Change: So my first question is going to come from the line of Bobby Brooks with Northland. Your line is open, please go ahead.

Robert Brooks: Hey, good morning, guys. Thank you for taking my question. So, on the press release, you specifically call out new program wins and improving demand trends for legacy programs that drove the 3.7 million year-over-year increase in GES sales. So just curious, what were those new program wins, and then what were those legacy program wins, and just any more color you could provide on that would be appreciated.

Bobby Brooks: Good morning, guys. Thank you for taking my question. So on the press release.

Bobby Brooks: You specifically call out new programs and improving demand trends for legacy programs that drove the

Bobby Brooks: You know 3.7 million, you'll be your increase in G.S. sales, so just curious, what were those new program ones and then what were those legacy program ones and just any more color you could provide on that would be appreciated.

Edward Richardson: Well, the biggest new program is what's going on throughout North America and in Europe: the large repowering sites and wind turbines for all many factors of wind turbines. And so in the quarter, we looked and shipped a number of large orders for our Ultra 3000, which are being used in this repower program for the wind turbines. In addition to that, we shipped a number of products to 19 other customers specific to replacing their lead asset batteries and their turbines, and also the electric locomotive modules, and our starter modules had good shipments in the quarter. Got it, fair enough.

Speaker Change: Well, the biggest new program is what's going on throughout North America and in Europe is this large repouring of sites and wind turbines for all.

Speaker Change: and many factors of wind turbines. So, in the quarter, we booked and shipped a number of large orders for our ultra-3000 which are being used in this repower program for the wind turbines.

Speaker Change: In addition to that, we shipped a number of products to 19 other customers, specific to replacing their lead-outs of batteries and their turbines, and also the electric locomotive modules, and our starter modules had good shipments in the quarter.

Unknown Executive: And then, kind of following up on that is I think the last month where the team did its first train show in Europe to introduce the older 3000 family of solutions.

Speaker Change: Got it, fair enough. And then, kind of following up on that, is I think at last month, where the team did its first trade show in Europe to introduce the older 3,000 family of solutions. So I just wanted to hear how that went, breaking into Europe would obviously be a major needle mover for Richardson.

Edward Richardson: So I just wanted to hear how that went. Breaking into Europe would obviously be a major need of mover for Richardson, and maybe if you could then touch on any key differences between the dynamics for selling to wind turbine operators and in the Americas versus Europe. Yeah, the need and want for our Ultra 3000 type product is as high in Europe as in North America. The difference for the most part is the GE number of GE turbines in Europe is much, much smaller than North America. So, as we've talked about for the past year, we've been able to pretty much dominate the GE wind turbine owner-operators with our product.

Speaker Change: and maybe if you could then touch on any key differences between the dynamics for selling to wind turbine operators in the Americas versus Europe.

Speaker Change: Yeah, the need and watch for our...

Speaker Change: Ultra 3000 type product.

Speaker Change: is his height in Europe, and is it in North America?

Speaker Change: The difference for the most part is...

Speaker Change: The GE, number of GE turbines in Europe is much, much smaller than North America. So, as we talked about for the past year, we've been able to pretty much dominate the GE wind turbine owner operators with our product. So, the four major platforms in Europe are Susilan, Senbian, Nordics, and SSB. We already have customers testing three of those that came from the show, but our booth was pretty full with people like Bestis, etc., again going back to this repowering. Their comment to me was, we do not want to put any more lead acid batteries in our in our turbines.

Edward Richardson: So the four major platforms in Europe, our Susan Lohn send me on Nordics and SSB. We already have customers testing three of those that came from the show. But our booth was pretty full with people like Bestis, etc. Again going back to this repowering, their comment to me was, we do not want to put any more lead asset batteries in our turbines. So when they do this repower at that point in time, they're looking to replace all the lead asset batteries with our now five platforms of.

Speaker Change: So when they do this repower, at that point in time, they're looking to replace all the

Speaker Change: Altra 3000, so we're really excited about the opportunity. We kind of have a lead on the competition with patents and exclusive design. So the show really just confirmed what we've been being told and we've come back and we've gotten together here and we're going to put together an even even increased launch of the product to get these customers to know that this product is available because it seems once they know it's available. We're already in discussions and doing beta testing with them. So it was a great show. It confirmed a lot of things that we thought and it looks like we're in a great position to take advantage of this global repower.

Speaker Change: That's terrific to hear. Just to confirm, it's not, you guys already have the products to place in these Nordex and the other three guys that you mentioned, it's not, you're not having to come up with a new solution, it's just kind of a plug-and-play, right?

Speaker Change: Yeah, right now and all five platforms and products at our booth, there might be little things I'll give you an example with Susan Lahn with that large program we have we going with Susan Lahn India in the end They asked for a couple of tweaks, put the handles in a different spot, move over the positive connector, which our engineering team is so talented.

Speaker Change: You know, to support the customer, we do these small tweaks, so there might be some small mechanical tweaks, but in terms of electrical performance, they're ready to go in and like I said before, they're being tested. I just want to add Bobby that this is a lot because of Europe , but there's also a number of farms in North America that have send beyond Nordic SSB and Suzan, we are also selling that there. In fact, we shipped some of those products about 200 units of the SSB in North America. So it's a kind of a launch of new platforms, but the major launch would be obviously to get us into Europe where we're not today.

Speaker Change: Awesome. Thanks for the call of guys and congrats on this.

Speaker Change: on the solid first quarter.

Speaker Change: Thank you, Robert.

Speaker Change: Thank you in one moment for our next question.

Speaker Change: And our next question is going to come from the line up on your solar storm with the Doty, your line is open, please go ahead.

Speaker Change: Hi, thank you so much for coming. Good morning. Congrats on the nice progress here. I'm just curious, how is the system in India progressing?

Speaker Change: the program in India? Oh yeah, just fantastic. In fact we had a long meeting with them also in Europe.

Speaker Change: So the first phase will be for...

Speaker Change: and then a replacement of the LES batteries, other wind turbines that are in the field. In India, there's 9,000 today. We are in the final sign-offs. We fully expect production orders this quarter, probably starting at the end of the month.

Speaker Change: with the nice shipments between now and December, but majority of will be the rollout will be 2025.

Speaker Change: But in addition, we also partnered with Kiba, who's the largest producer of pitch controls. That's the type of pitch control that Susan uses and their OEM product.

Speaker Change: and that design is complete and they're forecasting about a thousand new turbines a year starting in 2025 and our product will be in that new turbine. So all the stuff we're doing now is obviously replacing lead acid batteries and existing turbines in the field. Our first OEM order and program will be with Susilon and every new turbine they build will have our product in it giving them a jump on the competition. . .

Speaker Change: Okay, thank you. And what other sort of, what other points you have in that code of title or beta testing, where you see some near-term, maybe, or this coming through potentially.

Speaker Change: Yeah, you know, never things are beta and some are beta plus, you know, the starter modules we have that program going on with two of the largest diesel and electric locomotive manufacturers, the one program they were here has been signed off by their CEO and we're going to start shipping that product in volume starting January . Also, we have our inverter program that we're doing with with them and also the wind turbine manufacturers. Those are can have moved to from alpha to beta to beta plus. Again, we expect bookings.

Speaker Change: This quarter next

Speaker Change: We have the other stuff we talked about.

Speaker Change: We have the emergency lighting program going out with Metra.

Speaker Change: That's getting final signatures. We have the Microwave Generator Program in Korea, that customer, that's being tested with great success.

Speaker Change: We have the altar fridge, which replaced the lead as the batteries and refrigeration trucks.

Speaker Change: So, yeah, a lot of things in queue, but you know, one thing.

Speaker Change: As I mentioned, last year was challenging, but at no time at any of these programs stop.

Speaker Change: We continue to work with them, they continue to do the beta testing, we continue to tweak the product to meet their needs and their...

Speaker Change: and specific specs. And now we're seeing, as you saw in the quarter shipments and Q2 will be a very strong booking quarter for us compared to the last few quarters. So yeah, a lot of things moving, but the good news is they've never stopped and everything's been going not on schedule. Of course, we don't have a lot of patience, but the customer is very, very happy with our support. [inaudible]

Speaker Change: Hi, I need a suspect, Ben. If you're asking about the impact, the excluding foreign exchange, yes, it was a slight pickup of about 120-4,000, I think, if you look at our cash flow statement.

Speaker Change: Okay, I go further to the Indian Institute to decline or expect the same increase.

Speaker Change: Cause it's sitting on the line on the line right?

Speaker Change: Right, we still have a lot of inventories. You know, we would expect that the efforts that we're putting in to control inventory, we're going to continue to do that.

Speaker Change: As we've discussed before, we have one large vendor that the inventory will continue to grow. And that will happen through calendar year 2025, and as Greg mentioned in his script, that's in support of our long-term demand for our legacy products.

Speaker Change: That particular location, the factory is seizing production at the end of calendar 20, 25, so we are adding inventory and that will continue to grow.

Speaker Change: So, the other area that we anticipate will continue to show some growth is in green energy, as Greg just mentioned, we have a number of programs

Speaker Change: and we don't think it's necessarily going to grow substantially, but we are willing to invest in that area as he brings these new products to market. We have plenty of the ultra-3000s already built in stock. We have plenty of ultra-capacitors to build more in stock, but there could still be some increases for some of the other programs, so we don't want to rule that out, per se. On the other hand, we continue to monitor Greg's group as doing a phenomenal job of going through every order, every requirement for inventory, making sure it's going to ship when it comes in, and that's what we're seeing some of the offsets.

Robert Brooks: Okay, thank you. I was helpful.

Unknown Executive: I'll get back in here.

Unknown Executive: Thanks, Anja. Thank you, and one moment for our next question.

Speaker Change: Okay, thank you, that was helpful. I'll get back in here.

Speaker Change: Thanks so much. Thank you and one moment for our next question.

Chip Rewey: And our next question comes from the line of Chip. Really was really asset management. Your line has opened. Please go ahead.

Speaker Change: and our next question comes from the line of chip really with really asset management. Your line is open, please go ahead.

Edward Richardson: Good morning, Wendy, Ed, and everybody. Good quarter does seem like we're finally inflecting off the bottom, and things look good. Can you give a little more detail on the inventory? How much of it is PMT for semis? How much would be green energy? And how much kind of everything else? And then maybe just to sure us that the inventory is all still kind of stated. The art and ready to ship. And because it's so large, there's no aging of product life cycle on that side.

Speaker Change: Good morning, Wendy, and everybody. Good quarter does seem like we're finally inflicting off the bottom and things will look good.

Speaker Change: Can you give a little more detail on the inventory, how much of it is PMT for semis, how much would be green energy?

Speaker Change: and how much kind of everything else and then...

Speaker Change: Um...

Speaker Change: Maybe just to sure us that the inventory is all still kind of state-of-the-art and ready to ship.

Speaker Change: because it's so large there's no aging of product life cycle.

Edward Richardson: So that's one question. And second, again, with positive cash, positive operating cash flow in kind of the good forward thoughts on continuing cash. Finally, now might be a good time to start repurchasing a modest amount. I mean, not huge, but what do you think of that?

Speaker Change: on that side, so that's one question in second, again, with positive cash, positive operating cash flow, in kind of the good, forward thoughts on continuing cash.

Speaker Change: and we now might be a good time to start repurchasing modest amount. I mean not huge, but what do you think of that, Ed? All right, thank you.

Edward Richardson: All right, thank you.

Edward Richardson: All right, let me start with the inventory question, and then I'll turn it over to either Bob or Ed, and they can talk about what to do with this cash. In terms of inventory, where it kind of breaks out, there was a hundred and that's called 1111 million at the end of Q1. And about 21 and a half or so of that is related to green energy. We don't break TMT down by how much of that growth or how much of that inventory is related to the semiconductor market. So I can't tell you that off the top of our head here.

Speaker Change: Alright, let me start with the inventory question, and then I'll turn it over to either Bob or Ed and they can talk about.

Speaker Change: and what to do with this cash. In terms of inventory where it kind of breaks out, there was a hundred and let's call it 111 million at the end of Q1.

Speaker Change: and about 21 and a half or so of that as related to green energy, we don't break TMT down by...

Speaker Change: How much of that growth or how much of that inventory is related to the semiconductor market so I can't tell you that off the top of our head here. What I can tell you is we feel very good about the inventory we have. We don't see any risk there. Again, as I mentioned, a lot of it is coming, a lot of the growth has come from one of our largest suppliers for tubes. [inaudible]

Edward Richardson: What I can tell you is we feel very good about the inventory we have. We don't see any risk there. Again, as I mentioned, a lot of it is coming. A lot of the growth has come from one of our largest suppliers for tubes. And we've done this in the past, where we've had to add extra inventory when we were stopping production, and we've sold through every single tube we have. So we also go through with video every quarter and every year, a very in-depth analysis of our inventory. They question everything we do; they look at every closest out there, and we're not seeing again any risk there.

Speaker Change: and we've done this in the past where we've had to add extra inventory when we were stopping production and we've sold through every single tube we have.

Speaker Change: So we also go through with video every quarter and every year a very in depth analysis of our inventory. They question everything we do. They look at every quote that's out there and we're not seeing again any risk there. And then finally with any of the growth that is associated with our other gross growth initiatives, including the PMG business. Greg and his team have negotiated inventory balancing inventory stock returns. And all of those programs to make sure again that we always have the most current inventory that we need to serve the customer base. So with that, let me let the other guys answer the cash flow question.

Edward Richardson: And then, finally, with any of the growth that is associated with our other growth initiatives, including the PMG business, Greg and his team have negotiated inventory balancing, inventory stock return. And all of those programs to make sure, again, that we always have the most current inventory that we need to serve the customer base.

Edward Richardson: So, with that, let me let the other guys answer the cash flow question. Well, we're always asking, you know, at some point, are we going to start to rebuy the stock. One of the things that's occurring is the semiconductor waferfab business is starting to increase. And that takes a lot of inventory and a lot of resources. And it should probably know when a good year or a semi waferfab business is over 40 million and last year it was below 20.

Speaker Change: Well, we're always asked, you know, at some point are we going to start to rebuy the stock. One of the things to curing is the semiconductor wafer fab business is starting to increase. And that takes a lot of inventory and a lot of resources.

Speaker Change: and it should probably know when a good year, our semi-wafer pad business is over 40 million and last year it was below 20.

Edward Richardson: So if it turns around and that Lamb Research and Applied Materials and these companies are in that business, they're telling us that 2025 is going to be larger than ever, it will take a substantial amount of our cash to fund that growth.

Speaker Change: So if it turns around and that lamb research and the five materials and these companies are in that business are telling, telling us that 2025 is going to be larger than ever, it will take a substantial amount of our cash to fund that growth.

Speaker Change: by the owner talk about where the cash is located.

Speaker Change: Yeah, in addition to that, we do have of our 23 million in cash at the end of the first quarter, approximately three and a half million was in the US, and the rest is spread among 20 or so foreign subsidiaries that we need need the cash to operate our foreign subsidiaries, as you know, over 55% of our sales are outside of the United States. So, you know, we're constantly managing cash flow moving money around.

Edward Richardson: 3.5 million was in the US, and the rest is spread among 20 or so foreign subsidiaries that we need the cash to operate our foreign subsidiaries. As you know, over 55% of our sales are outside of the United States. So we're constantly managing cash flow, moving money around, but we need to manage it very carefully at this point.

Speaker Change: But we need to manage it very carefully at this point.

Unknown Executive: Okay, great.

Unknown Executive: All right, guys, congrats again. Thank you.

Speaker Change: Okay great. Alright guys, congrats again. Thank you.

Unknown Executive: And, as a reminder, if you would like to ask a question, please press star 11 on your touchtone telephone.

Speaker Change: Thank you, and as a reminder, if you would like to ask a question, please press star 1 1 on your touchtone telephone.

Andrew Rim: Here on our next question is going to come from the line of Andrew Rimm with Odinth and Partners. Your line is open. Please go ahead.

Speaker Change: Here's our next question, is going to come from the line of Andrew Grimm with...

Speaker Change: Oh, Denson, partners, you're in line with open, please go ahead.

Edward Richardson: Hi, Andrew. I want to follow up on the inventory question. When the how much is related to the one vendor or how much do you expect to increase it with the one vendor?

Edward Richardson: We have that part of the presentation in front of me and the group, but I would say that go ahead. Okay, we have about 30 million total with the one vendor, and we are forecasting over $10 million increase this year. Although, as Wendy said, you know, this quarter and continuing through this year, we expect to make continued progress. And reducing inventory in our other parts of the business. And then also Andrew, that inventory, and we'll grow through the end of calendar year 2025, and at which point if we will start burning it down. Right. Okay.

Speaker Change: We have that part of the presentation in front of me, Andrew, but I would say that go ahead, go ahead, go ahead, go ahead Bob. Okay, we have about 30 million total with the one vendor, and we are forecasting over $10 million, we're increased this year, although as Wendy said, this quarter and continuing through this year we expect to make continued progress, reducing inventory in our other parts of the business.

Speaker Change: and then also Andrew that inventory and we'll grow through the end of calendar year 2025 and at which point if we will start burning it down.

Edward J. Richardson: And then I think you said on the MX series in healthcare, you just say you're planning to launch those later in calendar. Under 25 or fiscal 25, Fiscal 25. So we'll anticipate those go towards the back end of calendar 24. I don't think so. You know, we want to make sure we get through life test and, you know, right now we're, we're about maybe 20, 25% through life test. It's going well, but we need to get through that, and we need to file all of our work instructions with the FDA. And so I think that's going to take us through the end of the year, and you'll see it, and, you know, RQ three possibly, if there's any issues, that could be as late as our Q4. But right now it looks good.

Speaker Change: Right, okay, and then...

Speaker Change: I think you said on the MX series in the healthcare, do you say you're planning to launch those later in calendar 25 or fiscal 25?

Speaker Change: Fist of 25.

Speaker Change: So, while in I thought it was going towards this back end of calendar 24.

Speaker Change: I don't think so. You know, we want to make sure we get through life test and, you know, right now we're about, maybe 20, 25% through life test, it's going well, but we need to get through that and we need to file all of our work instructions with the FDA. So I think that's going to take us through the end of the year and you'll see it in, you know, our Q3 possibly, if there's any issues that could be as laid for our Q4, but right now it looks good.

Edward Richardson: So is the first quarter, which is not quite annualizing close to a 16 million. Is that a reasonable run rate? And maybe you get a bump with the commercial launch of the MX series? We would definitely get above with a commercial launch of the MX series. I can't tell you that that's a, you know, going to be our run rate going forward. A lot of it again is predicated on the market. And, you know, so right now, for example, we're seeing a slowdown in our system sales that go to Latin America, more difficulty getting money from our customers there to pay for the systems. So I don't want to say that, you know, $3.5 million is our run rate.

Speaker Change: So, it's the first quarter which is not quite annualized in close to a 16 million, is that a reasonable run rate and maybe you get a bump with a commercial launch of the MX series?

Speaker Change: We would definitely get above with a commercial launch of the MX series. I can't tell you that that's a, you know, going to be our run rate going forward. A lot of it again is predicated on the market. And, you know, so right now, for example, we're seeing a slowdown in our system sales that go to Latin America. More difficulty getting money from our customers there to pay for the systems. So I don't want to say that, you know, three, three point five million is our run rate. We're not ready to say that. What we can say is that we're in more steady delivery production and delivery of the repaired Stratton Z. And that's going to help, you know, move that needle up. But the MX series will definitely be a commercial thumb.

Edward Richardson: We're not ready to say that. What we can say is that we're in more steady delivery, production, and delivery of the repaired Stratton Z. And that's going to help, you know, move that needle up. But the MX series will definitely be a commercial thumb.

Edward Richardson: And then for healthcare, is the operating expense running at about a six and a half million annualized run rate? Is that roughly correct? Let me see. I think it's a little one. That'd be it. You said six million, Andrew. Six and a half. That's probably a little high; less than that. Okay. So it is; I mean, you said earlier that you're close to kind of break even. If you get either a little bit of lift on the revenue, or is there an opportunity with maybe some of the new, the MX series, if you get some lift on gross margin, and that kind of pushes it over the hump to kind of break even?

Speaker Change: and then for healthcare is the operating expense running at about a six and a half million annualized generate is that roughly correct.

Speaker Change: I say...

Speaker Change: I think it's a lot.

Speaker Change: It's that of VAB, said 6 million, Andrew.

Speaker Change: Six and a half, that's probably too high.

Speaker Change: Life in that.

Speaker Change: Okay.

Speaker Change: So, I mean, you said earlier that you're close to kind of break even if you get either a little bit of lift on the revenue or is there an opportunity with maybe some of the new MX series, easy to get some lift on gross margin and that kind of pushes it over the hump to kind of break even.

Edward Richardson: Yes, both of those factors will be in play. The Siemens series, all of them, the ZEM, the MX series, are better margin for us. So we'll definitely provide some upside there. All right.

Speaker Change: Yes, both of those factors will be in play. The Siemens series, all of them, the ZEM, the MX series, are better margin for us. So we'll definitely provide some upside there.

Gregory Peloquin: And then maybe one for Greg on the PMP and GES backlog. You said it was 97. So that was a sequential decline. Was all of the decline? Was that all GES? Most of it was. And most of the reduction in inventory was also GES. You know, sales are up 27%. So the book to Bill was below one. So that lowered our backlog a little bit. But it's still so strong and 97 million. And I think GES is up over 40. But we're seeing so far. And I think we're over the halfway point of Q2. Looks to me that that backlog will be back.

Speaker Change: All right, and then maybe one through Greg on the...

Speaker Change: PMP and GEFFB, you said it was 97, so that was a sequential decline, was all of the decline, was that all GEFs?

Greg Pelacone: Most of it was, and most of the reduction in inventory was also GES, you know, still is about 27% so the book to Bill was below one. So that lowered our backlog a little bit, but it's still so strong at 97 million and I think GES is up over 40.

Greg Pelacone: But we're saying so far and I think we're over the halfway point of Q2, it looks to me that that backlog will be back. Very strong book to build right now and very strong bookings of this quarter.

Gregory Peloquin: Very strong book to Bill right now. And very strong bookings of this quarter. And on the gross margins, I mean, you noted they were a little bit below.

Gregory Peloquin: But if we think about kind of the historic or 3032, are you guys still kind of comfortable with that on a more of a training 12 months basis for the total company, Andrew? No, just for those two segments. It's really a quarter to quarter in terms of product mix. Obviously, we make more margin, strong margin on our engineered solutions products and lower margin on our components business when we're just designing in the components to a separate customer's design versus when we use those components and then design to manufacture our own products here. So, you know, that'll kind of move it around as the percent of our sales as components and the percent of our sales that's engineered solutions.

Speaker Change: And on the gross margins, you noted they were a little bit below. But if we think about kind of the historic 30-32, you guys still kind of comfortable with that on a more of a training 12 months basis.

Speaker Change: for the Total Company Andres.

Speaker Change: No, just for those two segments.

Speaker Change: Yeah, it's really a quarter to quarter in terms of product mix, obviously we make more, more margin, strong margin, our engineered solutions products and lower margin on our components business, when we're just designing in the components to a separate customer's design versus when we use those components and then design and manufacture our own products here.

Speaker Change: You know, that kind of moving around as the percent of ourselves, as components and the percent of ourselves, that's engineered solutions, but it'll be, you know, 30 plus margin overall.

Gregory J. Peloquin: But it'll be, you know, 30 plus margin overall. The other thing to add to that, Andrew, is that as these new programs go into production. And as the semiconductor market continues to improve and recover, we will see an improvement, or let's call it a reduction in the underabsorption, which is a direct hit to the gross margin. And when you look at underabsorption for the total company for Q1, I think it was about a one-and-a-half percent reduction in our gross margin. So, as, again, as we see those programs go into full production, that's going to pick up the black, and you're going to see a margin improvement from that.

Speaker Change: The other thing to add to that Andrew is that these new programs go into production and as the semi-conductor market continues to improve and recover, we will see an improvement or let's call it a reduction in the underabsorption which is a direct hit to the gross margin and when you look at underabsorption for the total company for Q1 I think it was about a 1.5% reduction in our gross margin so as again as we see those programs go into full production that's going to pick up the slack and you're going to see a margin improvement from that.

Unknown Executive: All right. Thank you. That was a great call. Appreciate it, you guys. Thank you.

Speaker Change: All right, thank you, I was great calling, appreciate it, you guys.

Unknown Executive: One moment for our next question.

Speaker Change: Thanks, Andrew. Thank you one moment for our next question.

Ross Taylor: And our next question is going to come from the line of Ross Taylor with ARS Investment Partners. Your line is open. Please go ahead.

Speaker Change: And our next question is going to come from the mine of Ross Taylor with ARS Investment Partners, your line is open, please go ahead.

Edward Richardson: Thank you. And congratulations on the more congratulations on the continued improvement in the business trends. Real quick, you commented, and we've talked in the past about how you've been told by your semi-calf equipment customers that 25 was going to be effectively a record year. The question is that a calendar year, and also a record year you indicated is basically somewhat north of 40 would be north of 40 million, and it appears that from backing out numbers that this is far and away, your most profitable business, perhaps with an operating margin, half again, what we see in some other parts of the business.

Ross Taylor: Thank you, and congratulations on the continued improvement in the business trends. We're welcome. You commented and we've talked in the past about how you've been told by your semi-capacipping customers that 25 was going to be effectively a record a year.

Ross Taylor: Question. Is that a calendar year and also a record year you indicated is basically somewhat north of 40 would be north of 40 million and it appears that from backing out numbers that this is far and away you're most profitable business perhaps with an operating margin half again what we see in some other parts of the business. So I'm curious are when you're thinking about this are you looking at 25 calendar being a 40 million dollar plus run rate potentially in revenues for my capital.

Edward Richardson: So I'm curious, are when you're thinking about this, are you looking at 25 calendar being a 40 million dollar plus run rate, potentially in revenues for my capital. Yes, yeah, in calendar 2025. Yeah, calendar. And you're correct. Yeah, because I mean, to me, it backs out. It looks like it, as I said, about half again, perhaps what you're carrying. And perhaps some other parts of the business that we've just talked about. Also, you've commented you have inventory. How much of the semi-calf equipment business you're expecting to do, do you think you're going to be able to fill by drawing down inventory versus new builds.

Speaker Change: Yes, in calendar 2025. Yeah, calendar. And you're correct. That's from the highest merger.

Speaker Change: Yeah, because I mean, to me it backs out, it looks like it, as I said, about half again, perhaps what you're carrying and perhaps some other parts of the business that we've just talked about. Also, you've commented you have inventory. How much of the semi-cap equipment business you're expecting to do. Do you think you're going to be able to fill by drawing down inventory versus new builds?

Edward Richardson: So we don't have that detail in front of us; you know, that might be something we can discuss offline. Sure, that would be great, because I would think they're obviously that that will help in cash conversion and helping finance the growth in the space that you are indicating you will need to finance. Additionally, you're talking about battery starter packs and, like, what are we looking at on a dollar per unit basis for those, and what kind of volume are you thinking you're going to be able to do over the next 12, 15 months. Yeah, I can't share.

Speaker Change: Well, I thought we don't have that detail in front of us, you know, that might be something we can describe offline. Sure, that would be great. I think that would obviously, that will help in cash conversion and help in financing the growth in the space that you are indicating you need to finance.

Speaker Change: Additionally, you've talking about battery starter packs and like, what are we looking at on a dollar per unit basis for those and what kind of unit volume are you thinking you're going to be able to do over the next 12 15 months?

Edward Richardson: We have NDAs, and I'm not going to let my competition know what I sell for these, but right now, we have an agreement for a thousand trains. That's only for one end customer right now. The products being featured being featured at their at their trade show, they have McCormick Place and they feel they expect to get more train owner operators to install this great product. So right now on the books about a thousand trains next year. Okay, so it's going to be a meaningful driver on the revenue side in the next 12, 15 months than you would expect.

Speaker Change: Yeah, I can't share, we have NDAs, and I'm not going to let my competition knows what I sell for these, but right now we have an agreement for a thousand trains, but that's only for one end customer. Right now, the products being featured, being featured at their at their trade show, they have McCormick Place, and they feel they expect to get more train owner operators to install this great product. So right now on the books about a thousand trains next year. [inaudible]

Speaker Change: Okay, so it's going to be a meaningful driver on the revenue side in the next 12-15 months then you would expect.

Edward Richardson: It'll be a strong part of it, absolutely. Okay, great, because I mean, it just looks to me like once again, we're setting up for having gone through a pretty sloppy, you know, last 12, 15 months. It looks like we're really setting up for. You know, a return to some really meaningful profitability, meaningful revenue growth, and setting the stage to really kind of launch you guys into. 2025, 2026 and beyond on a strong, but is that where you guys see things. Absolutely, yes, absolutely. Okay, great.

Speaker Change: in a via strong part but absolutely. Okay, great, because I mean, it just looks to me like once again, we're setting up for having gone through a pretty sloppy, you know, last 12, 15 months. It looks like we're really setting up for...

Speaker Change: You know, our turn to some really meaningful profitability, meaningful revenue growth, and setting the stage to really kind of launch you guys into the 2025-2026 and beyond, on a strong thread. Is that where you guys see things?

Ross Taylor: I'll leave it back. I would just say, obviously, as you free up cash flow, don't be afraid to put some of it. You can probably afford to have a small amount of leverage. I wouldn't argue putting a lot of leverage on the balance sheet. But perhaps if you do something strategic with the medical imaging business, you can put some of those proceeds towards reducing the share base outstanding because it spikes me as you're setting up. If you did it around $1.50, it had some one-time items in it. You know, in your peak earnings, you're recently, and I think that, you know, so if we look at a return anywhere close to that, you know, you're pretty, pretty inexpensive stock here.

Speaker Change: Absolutely, yes, absolutely.

Speaker Change: Okay, great.

Speaker Change: I'll leave it back. I would just say obviously as you free up cash flow, don't be afraid to put some of it. You can probably afford to have a small amount of leverage. I wouldn't argue putting a lot of leverage on the balance sheet. But perhaps if you do something strategic with the medical imaging business, you can put some of those proceeds towards producing the sharebase outstanding because it strikes me as you're setting up. You did it down around $1.50. It has some one-time items in it.

Speaker Change: You know, when your peak earnings you're recently and I think that, you know, so if we look at overturn anywhere close to that, you know, you're pretty pretty inexpensive stock here. In fact, a brutally inexpensive stock and I think investors would be really happy to see even a minor commitment by the company to reduce into shares outstanding.

Unknown Executive: In fact, a brutally inexpensive stock. And I think investors would be really happy to see even a minor commitment by the company to reducing the shares outstanding. But thank you for the way you're always good. Thank you.

Speaker Change: Thank you for- Oh, you're all good, sir, yes. Thank you. Thank you.

Unknown Executive: And I'm sure we know further questions at this time.

Edward Richardson: And I would like to have the conference back over to Ed Richardson for his closing remarks. Well, thank you again for joining us today. We appreciate your investment in interest in Richardson Electronics. And you're welcome to call us at any time. We're always free and happy to talk to you. We look forward to our ongoing discussions and sharing our second quarter results with you in January. Thanks very much.

Speaker Change: Thank you, and I'm showing no further questions at this time, and I would like to have the conference back over to Ed Richardson for his closing remarks.

Ed Richardson: Well, thank you again for joining us today. You appreciate your investment and interest in Richardson Electronics.

Ed Richardson: and you're welcome to call us at any time we're always free and happy to talk to you. We look forward to our ongoing discussions and sharing our second quarter results with you in January.

Unknown Executive: This concludes today's conference call. Thank you for participating, and you may now disconnect. Thank you very much.

Ed Richardson: Thank you very much.

Speaker Change: This concludes today's conference call. Thank you for participating and you may now disconnect.