Richardson Electronics designs and manufactures engineered power, microwave, energy storage, and display products from LaFox, Illinois, selling into semiconductor wafer fab equipment, radar and satellite communications, wind turbines, and medical and industrial equipment. First-quarter FY2027 net sales rose 18.9% to $64.9M, the ninth straight year-over-year increase, net income more than doubled to $4.1M, and backlog reached $184.4M, up 36.9%. The company carries no debt. The backlog is the thesis; the semiconductor cycle is the risk.
Richardson Electronics designs, manufactures, and supplies engineered components and systems from its headquarters in LaFox, Illinois, and its shares trade on Nasdaq. It reports three segments. Power and Microwave Technologies, the largest, sells power components and RF and microwave products used in semiconductor wafer fabrication equipment, satellite communications, radar, and defense communications, along with replacement electron tubes. Green Energy Solutions sells ultracapacitor modules for wind turbines and other power applications and is building a battery energy storage business. Canvys designs custom displays for medical and industrial equipment makers. FY2026, the year ended May 30, 2026, produced net sales of $228.6M, up 9.4%, and net income of $6.4M against a loss of $1.1M a year earlier.
The first quarter of FY2027 is why the desk is writing now. Net sales for the quarter ended August 29, 2026 were $64.9M, up 18.9% from $54.6M, the ninth consecutive quarter of year-over-year growth. Operating income rose to $5.1M from $1.0M, net income to $4.1M from $1.9M, and diluted earnings to $0.27 per share from $0.13. The figure that sets the outlook sits outside the income statement. Backlog reached $184.4M, up 36.9% from a year earlier and 12.2% from $164.4M at the end of FY2026, the highest level in more than three years. Management said about 75% of the PMT and GES backlog is scheduled to ship during FY2027.
The Human Translation: Richardson makes the specialized parts that go inside chip-making machines, radar and satellite equipment, wind turbines, and medical and industrial screens. Orders waiting to be filled have climbed to about $184M, enough to keep its plants busy for most of the next year, and the company is earning real money again after two thin years. It owes nothing on its credit line and pays a small quarterly dividend. The risk is that its biggest market, semiconductor equipment, runs in cycles, and the last downturn cut the company's sales by a quarter.
Power and Microwave Technologies carried the quarter. Segment sales rose 19.7% to $46.8M, driven by semiconductor wafer fab equipment makers and by RF and microwave products for satellite communications, radar, and defense, and segment gross margin rose to 35.4% from 31.3%. Excluding the legacy healthcare business, which the company folded into the segment after selling its healthcare assets in January 2025, sales rose 23.1% to $46.6M. Management said its semiconductor fab customers expect growth well into calendar 2027. The segment's backlog was $99.4M at quarter end, the largest of the three books.
Green Energy Solutions grew faster. Segment sales rose 27.1% to $9.2M and gross margin improved to 32.6% from 29.6%, and management said most of the growth came from wind. The core product is an ultracapacitor module that replaces lead-acid batteries in the pitch systems that turn turbine blades, sold for platforms from GE, Suzlon, Nordex, and Enercon, and the company says it has sold about $47.4M of wind modules since launch. In the quarter it shipped about $1.5M of replacement modules to Suzlon and was confirmed as an original equipment supplier on a new Suzlon platform. The segment's backlog was $43.2M, and management expects double-digit growth in FY2027.
Battery storage is the newest line and the one to read with the most discipline. Richardson positions itself as a U.S.-based integrator of commercial, industrial, and utility-scale storage systems, pairing partner components with its own power conversion and energy management. It booked a $2M storage program in the first quarter, has begun shipping 18 customized units for seven remote communities in Alaska, and describes a California microgrid program worth about $10M across 10 to 20 projects over two years. It is installing a 2.0 megawatt, 8.0 megawatt-hour system at its LaFox headquarters as a customer reference site, expected to operate in the first half of calendar 2027, and cites nearly 50 active opportunities. The desk reads these as early orders, not yet a revenue base. On management's own account, wind, not storage, drove the quarter.
Canvys is the steadiest of the three. Sales rose 7.9% to $8.9M, mainly in North America, and gross margin rose to 33.0% from 30.9%, which management attributed primarily to a tariff refund. The segment builds custom displays, some under frame contracts that run two years or longer, carried a $41.8M backlog with a book-to-bill ratio of 1.1, and ships most of that backlog within the fiscal year. It is the part of the company least tied to the semiconductor cycle, though its sales also fell 17.5% in FY2024, so it softens the cycle rather than escaping it.
The margin line needs one adjustment to read cleanly. Consolidated gross margin was 34.6% against 31.0% a year earlier, and management said a refund of tariffs paid under the International Emergency Economic Powers Act added about 170 basis points. Removing it puts the underlying margin near 32.9%, still above the prior year and above the 31.2% of FY2026. Management said refunds arrive sporadically and that it does not expect the same amount again. Operating expenses rose to $17.4M but fell to 26.8% of sales from 29.2%, which is the operating leverage a manufacturer earns when volume returns to fixed plants. That leverage, not the refund, is the durable part of the quarter.
The cycle is the most important context in this dossier, and the company's own history shows it plainly. Net sales were $224.6M in FY2022 and a record $262.7M in FY2023, when net income reached $22.3M and Green Energy Solutions sales more than doubled to $47.6M. FY2024 then fell 25.2% to $196.5M, with net income of $61,000, as the company cited challenging conditions in its semiconductor wafer fab market and delays in Green Energy Solutions programs; segment sales fell 21.7% in Power and Microwave Technologies and 51.2% in Green Energy Solutions. FY2025 recovered to $208.9M and FY2026 to $228.6M. The current quarter's annualized pace is close to the FY2023 record, and the desk treats that as evidence of recovery, not proof of a new level.
The quarterly figures show where the turn happened. Net sales were $49.5M in the second quarter of FY2025, $53.8M in the third, and $51.9M in the fourth. FY2026 ran $54.6M, $52.3M, and $55.5M through three quarters, then $66.2M in the fourth, up 27.6%, before $64.9M in the first quarter of FY2027. Two consecutive quarters above $64M, after six between $49M and $56M, mark the step change. The chart in this dossier tracks those eight quarters.
Earnings are recovering faster than sales. FY2025 ended with a net loss of $1.1M, which included a $5.1M loss on the disposal of healthcare assets. FY2026 net income was $6.4M, or $0.44 per diluted share, and the first quarter of FY2027 alone produced $4.1M, almost two thirds of that total. The prior-year first quarter included $1.4M of other income, most of it a non-recurring gain of about $0.9M, so the operating comparison is stronger than the net one: operating income rose more than fivefold, from $1.0M to $5.1M.
The balance sheet is the reason the cycle is survivable. Cash was $36.9M at August 29, 2026, up from $31.8M at the fiscal year end, with no balance outstanding on the company's revolving credit line with PNC Bank. Stockholders' equity was $169.2M against total assets of $211.7M. The quarter produced $5.9M of operating cash flow and $4.2M of free cash flow after $1.7M of capital spending. A company that funds inventory, plant, and a new storage business from its own cash does not need the market, and in a year when the five-year Treasury crossed 5%, that separates it from the peers that do.
Working capital is the line to watch inside that balance sheet. Inventory was $103.3M, about 45% of FY2026 sales and roughly 61% of equity. For a company that supplies replacement tubes and long-lifecycle components to maintenance buyers, deep inventory is part of the service, and management described balancing inventory discipline against support for its semiconductor and wind customers. It also ties up cash. FY2026 operating cash flow was $0.8M against $10.6M in FY2025, in large part because receivables rose to $33.2M from $24.1M as sales accelerated into the fourth quarter. The first quarter's $5.9M shows some of that converting back to cash.
Control is concentrated, and the filings say so. Edward J. Richardson, the chairman, chief executive, and president, joined the company in 1961 and has served on its board since 1965. Through a trust he holds 98% of the Class B shares, which carry ten votes each, and the 2025 proxy statement put his voting power at 61.4% and his age at 83. The company uses Nasdaq's controlled company exemption. Wendy Diddell has been chief operating officer since 2015 and a director since 2021. For outside shareholders that structure means one long-tenured holder sets the strategy, and succession is a question worth weighing for a controlling shareholder whose tenure spans more than six decades.
The dividend is modest and consistent. The board pays $0.06 per common share each quarter and $0.054 per Class B share, the 90% ratio the company's governing documents require, and declared the next payment for November 25, 2026. FY2026 dividends totaled $3.4M against net income of $6.4M. At that size the dividend signals continuity rather than surplus, and management's stated priority for cash is organic growth, including the storage demonstration site and added shifts for semiconductor capacity.
The macro backdrop reads two ways for this company. The Federal Reserve's October Beige Book described manufacturing as the strongest part of the economy, citing data centers, power generation, and defense, which are the end markets Richardson's newer products serve. In the same week the semiconductor index fell more than 11% on doubts about the pace of AI infrastructure spending. Richardson sells into the equipment that builds chips rather than into AI spending directly, but its largest segment moves with fab investment, and fab investment answers to the same capital budgets. The rate regime the weekly roundup has tracked matters less here than for most of the library, because the company does not borrow.
On valuation, the desk makes no price targets. The public record supports two observations. First-quarter earnings of $0.27 per diluted share compare with $0.44 for all of FY2026, with three quarters still to report. And a backlog of $184.4M against FY2026 sales of $228.6M gives the company more visibility than it has had in more than three years. Neither observation removes the cycle risk; both explain why the company deserves to be read on its backlog and margins rather than on its trough years.
The scenario map has three branches. In the first, semiconductor fab demand holds into calendar 2027 as customers expect, wind replacements keep scaling, and storage orders convert, carrying annual sales past the FY2023 record with margins near current levels. In the second, fab demand levels off but the existing backlog ships on schedule, and the company earns steadily on the largest book it has carried in three years. In the third, the fab cycle turns down as it did in FY2024, sales fall faster than costs, and the thesis is retested on a debt-free balance sheet and an inventory position that would need to convert to cash. The desk names the branches so each filing can be read against them.
The checkpoint set, stated fully. First, backlog each quarter, in total and in Power and Microwave Technologies, the leading indicator of whether the fab recovery is extending. Second, gross margin excluding tariff refunds, which shows whether the improvement is mix and plant absorption or a one-time benefit. Third, Green Energy Solutions sales and storage bookings, which show whether the newest business becomes a revenue line. Fourth, inventory, receivables, and operating cash flow, which show whether growth is turning into cash. The second-quarter report, for the period ending in late November, is expected in early January on the company's past calendar. The thesis strengthens on a rising backlog with stable underlying margins; it weakens if fab orders slow while inventory builds.
Richardson makes specialized parts for chip-making equipment, radar and satellite systems, wind turbines, and medical and industrial screens. Sales grew 18.9% last quarter, profit more than doubled, and the orders waiting to be filled reached about $184M, the most in over three years. It has no debt and pays a small dividend. Its biggest market moves in cycles, and the last downturn cut sales by a quarter, so the bet is on a debt-free supplier riding a recovery that has to keep going.
Watch backlog each quarter, especially in Power and Microwave Technologies, and gross margin excluding tariff refunds. The first says whether the semiconductor recovery is extending; the second says whether the margin gains are operating improvement. Operating cash flow confirms whether growth is turning into cash.
Ticker: RELL
Exchange: NASDAQ
Sector: Electronic Components
1Q FY2027 Net Sales: $64.9M, up 18.9%
1Q FY2027 Net Income: $4.1M ($0.27 per diluted share)
FY2026 Net Sales: $228.6M, up 9.4%
Backlog: $184.4M at August 29, 2026, up 36.9%
Cash: $36.9M; no borrowings on the revolver
Dividend: $0.06 quarterly per common share
Published: October 2026
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