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Richardson Electronics Q2 FY2026 Investor Presentation January 8, 2026 NASDAQ: RELL
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We provide solutions that improve our world through innovative engineering and manufacturing in collaboration with our employees, customers and technology partners. MISSION To make our world a better, more sustainable place by providing innovative technology solutions. VISION • We are a diverse family; we take care of our people. • We focus on long term viability for our company, our community and our world. • Every interaction is important and deserving of respect. • We believe in hard work, reward, and the determination to succeed. VALUES
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Forward Looking Statement This overview includes certain “forward-looking” statements as defined by the Securities and Exchange Commission. Statements regarding the Company’s business which are not historical facts represent “forward-looking” statements that involve risks and uncertainties. For a discussion of such risks and uncertainties, which could cause actual results to differ from those contained in the forward-looking statements, see Item 1A, “Risk Factors” in the Company’s Annual Report on Form 10-K. The Company assumes no responsibility to update the “forward-looking” statements in this overview three- and twelve-month new information, future events, or otherwise. Note on financial presentation: The consolidated financial results included in this presentation are as reported for the three months ending November 29, 2025, and twelve-month period ended May 31, 2025.
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About Richardson Electronics
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ENGINEERED SOLUTIONS Richardson Electronics (NASDAQ: RELL) designs and manufactures more than 55% of the products it sells for power, microwave, and imaging solutions to industries worldwide. Technical expertise and “engineered solutions” based on our core engineering and manufacturing capabilities Value added solutions through design- in support, system integration, prototype design and manufacturing, testing, logistics, and aftermarket technical service and repair Global infrastructure and support to serve customers wherever they are located
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Key Facts & Figures Strong balance sheet with robust cash and cash equivalents and no debt RELL is global with 60+ locations worldwide including three strategic warehouse locations and legal entities in 24 countries Headquarters in LaFox, Illinois, co-located with US-based manufacturing facility More than 20,000 OEM and end-user customers throughout the world 430+ employees with over half in sales, engineering and product management Certified experts that are ISO 9001:2015 and ISO 13485:2016 certified
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January 2025 Richardson Healthcare Strategic Transition Overview • In January 2025, Richardson announced a strategic transaction in which the Company sold most Richardson Healthcare assets to DirectMed Imaging (DirectMed) Deal Terms • Transaction closed on January 24, 2025 • The sale price was $8.2 million including net working capital adjustments • Under the terms of the transaction, Richardson Electronics sold the Healthcare business unit but retained its CT tube engineering and manufacturing assets under an exclusive supply agreement with DirectMed Go Forward Considerations • The strategic transaction is expected to simplify the Company’s business, improve Richardson’s financial model long term, and allow the Company to prioritize profitable opportunities within higher growth markets • The Company will continue to support DirectMed through a 10-year exclusive global supply agreement in which Richardson will supply DirectMed with repaired Siemens CT X- ray tubes • Richardson Electronics will also continue manufacturing ALTA CT X-ray tubes for DirectMed for approximately 12 to 15 months • The remaining assets of the Richardson Healthcare reportable segment, primarily CT X-ray tube manufacturing and repair, will be consolidated into the Company’s PMT reportable segment beginning Q1 FY26 Use of Proceeds • Richardson Electronics intends to use proceeds from the asset sale to invest in the Company’s growth initiatives – primarily within its GES reportable segment
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Our Business Units Green Energy Solutions (GES) CanvysPower & Microwave Technology (PMT) o FY2025 Revenue: $33.1M o Custom display solutions for healthcare, industrial, retail and transportation applications o All-in-one computer display solutions o Engineering design and support o FY2025 Revenue: $137.8M o Power grid and microwave tubes (EDG) o Power management for 5G (PMG; started in 2014) o In-house manufacturing and partnering with leading technology suppliers o Global engineering and design support o Key supplier to the semiconductor industry o FY2025 Revenue: $28.7M o Designs and manufactures key products for the fast-growing energy storage market and power management applications o Leverages existing global infrastructure and expertise o Products for numerous green energy applications such as wind, solar, hydrogen, EVs, and synthetic diamonds *Richardson Healthcare FY2025 Revenue: $9.3M, starting in Q1 FY2026 Healthcare results are consolidated into the PMT segment
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Growth Strategies
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Strategy Supported by Strong Core Business, New Products and New Markets Management has created a strategic plan focused on driving growth and creating sustainable value for shareholders Strategy focused on leveraging core engineering and manufacturing capabilities to expand product lines into large, fast growing global markets Growth supported by strong core business, 75+ years of engineering capabilities, and global platform Global footprint supports customers and maintains strong strategic partnerships with leading manufacturers New markets and applications support significant expansion to the Company’s growth opportunities
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Power Management Roadmap Long-standing relationships with leading components manufacturers combined with our in-house manufacturing and engineering capabilities supports a multi-year strategy aimed at providing higher value sales Services Technology Partners System Energy Storage System (ESS) Modules Engineered Solutions Phase I Phase II Phase III
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Other Mid-Term Solutions Key Markets: • Power management • Green Energy Solutions (GES) Key Applications: Transportation Industrial Energy Storage Wind/Solar Key Products • Metra Emergency Lighting • Engine Start Module • SiC Mosfets Key Products • LiFeP04 Battery Modules • Ultracapacitors AVG modules • PCIGBT Modules Key Products • C&I BESS • Utility BESS • Data Center BESS Key Products • Pitch Energy Modules • Turbine-Guard • Inverter Modules $ SO M
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FY26-28 Wind Turbine Opportunity Customer Problem: Wind turbine manufacturers and operators needed an environmentally friendly solution to extend the life of auxiliary power supplies for their Pitch Energy Modules. Richardson Electronics’ Solutions: Developed the first ultracapacitor-based plug-and-play replacement for batteries within wind turbine pitch systems. Since launching, the Company has sold approximately $43 million in wind modules. OEM Turbine Platforms Today RELL can expand its market share in the US and throughout the rest of the world with the Patented ULTRA3000® and the ULTRAPEM® both with GE Turbines as well as other OEM Turbines. U.S. $237M Latin America $35M Canada $20M Europe $150M Australia $12M Total $454M Action Plan • Continued development of associated products • Invest in Field Engineers • Improve cycle time to market for new products • Develop strategically located R&D center to reduce time to market • Expand resources globally Global TAM
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Key Customer Testimonial for Patented Pitch Energy Modules “If you were to ask any wind technician who works on electric pitch systems what the weak link is in the whole system, most would likely say it’s the pitch batteries. Even without looking at the data, any technician knows this, as the task of exchanging and testing battery packs has been a part of their routine for decades. At TransAlta, we were looking for a solution to this issue, as our data shows that pitch faults due to weak batteries is one of our leading causes of downtime and lost production on our GE platforms. In this search for a solution, we met with Richardson Electronics who provided us with a plug and play solution with no modifications to our machines, allowing for an easy install. Richardson was very patient with us as we used caution moving into using their Ultra- caps. We chose to trial the Ultra-caps on several machines, at two sites, for a whole year before making the purchase. After that trial period, we can say that they have been an excellent upgrade, and we can’t wait to get these installed on the rest of the fleet. We have confidence in the product after our trial period, and we have many great reviews from other wind companies that made the switch 2-3 years ago and haven’t looked back. Switching to Ultra-caps is going to reduce the number of hub entries & climbs our technicians need to make in a day and we all know that the weather doesn’t always cooperate when we need to get into a hub. Ultra-caps are the solution to reducing lost production, freeing up man-power for more important tasks, and increasing revenue for many years to come. ” Dan Layton, Supervisor Soderglen & Lakeswind LTSA, TransAlta Corporation, one of Canada’s largest producers of wind generation
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Energy Storage Solutions (ESS) Growth Strategy New energy storage technologies bring disruptive technologies into niche markets. • Existing technology partners • Established engineering expertise to develop innovative solutions, such as hybrid ultracapacitor-flow battery systems • Pursuing shared revenue model through virtual power plants (VPP) Market Opportunity Go to Market and Development Strategies Leveraging RELL’s Platform and Capabilities • $32.6 billion global market for battery deployments in 2025 according to Fortune Business Insights • Projected to grow to $114 billion by 2032, reflecting a CAGR of 19.6% • Identified niche market for storage requirements in Illinois • Available government incentives can cover the expense of demonstrating new technologies over a multi-year period 1 st Half CY2026 • Deploy Battery Energy Storage Systems (BESS) at RELL facility to serve as a demonstration project for future customers FY 2026 – Phase 1 • Focus on medium size C&I projects primarily in Illinois FY 2028 – Phase 2 • Develop in-house manufacturing of large-scale long duration energy storage FY 2028+ • Continue to vet and develop additional systems to provide differentiating value propositions for various niche markets Stores energy during off hour low consumption periods Which can be sold or used during high peak periods to help balance the grid
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Key Customers
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FY26 Expectations • Expect near-term volatility associated with potential impacts on global trade from U.S. trade and economic policies • Minimal purchases come from China, limiting the expected impact from tariffs • Multiple warehouses for strategic stocking • Longer term expects to capitalize on current policies intended to drive manufacturing back to the U.S. and increase the need for U.S. content; opportunity to improve absorption by leveraging LaFox manufacturing capabilities to support technology partners and customers expanding U.S. manufacturing • Steady/increasing sales of wind turbine modules • Regular shipments from existing inventory • New significant orders from existing and new customers • Anticipated new significant orders from new customers for UltraPEM® and future expansion into the EU • Launch of StartSaver by Wabtec in the EV rail segment • Semi-wafer Fab Market • Year-to-date semiconductor wafer fab sales grew 21% year-over-year • Key customers forecasting growth for the remainder of CY2026 Wabtec StartSaver Ultracapacitor System powered by Richardson Electronics
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Financials
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Q2 FY2026 Financial Highlights(1) 19 • Consolidated net sales for the second quarter of FY2026 increased 5.7% to $52.3 million, compared to net sales of $49.5 million in the prior year’s second quarter, primarily due to higher sales in the Company’s GES and Canvys business segments partially offset by lower sales in the PMT segment. • Sixth consecutive quarterly year-over-year increase in sales. • When excluding Healthcare, for which the majority of assets were sold in January 2025, net sales increased by 9.0% year-over-year. Healthcare results, including prior periods, are consolidated into the PMT segment beginning in Q1 FY2026. • Consolidated gross margin for the second quarter of FY2026 was 30.8%, compared to 31.0% during the second quarter of FY2025. The 20-basis point decrease in consolidated gross margin was primarily due to lower manufacturing absorption in PMT, product mix. • Net loss was $0.1 million for the second quarter of FY2026, versus a net loss of $0.8 million in the second quarter of FY2025. • The Company focused on improving gross margins, reducing inventory levels, strengthening the balance sheet, and investing in long-term strategic growth opportunities. Net Sales ($ in millions) $155.9 $208.9 FY2020 FY2025 5-Year Growth CAGR Growth: 6.0% Net Income (Loss) ($ in millions) ($1.8) $3.2 FY2020 FY2025* 5-Year Growth CAGR Growth: n/a ($0.8) ($0.1) Q2 FY2025 Q2 FY2026 $49.5 $52.3 Q2 FY2025 Q2 FY2026 *FY2025 non-GAAP net income is adjusted to exclude a one-time loss on the sale of assets of the Company’s Healthcare business and to exclude a state tax valuation allowance adjustment (1) Consolidated financial results as reported and include Richardson Healthcare
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Balance Sheet and Cash Flow • Strong balance sheet with no debt, and $33.1 million in cash and cash equivalents • No borrowings outstanding under $20.0 million revolving line of credit • The period of elevated inventory investment related to a single critical supplier is nearing completion, with expected final inventory receipts in the first quarter of calendar 2026, after which inventory levels should normalize and cash conversion improve • Allocated $0.9 million of capital in Q2 FY2026 to support the Company’s regular cash dividend • Capital expenditures were $1.6 million in Q2 FY2026 primarily related to the Company’s manufacturing business, facilities, and IT systems • The Company continues to invest in working capital to support its growth initiatives ($s in 000s) November 29, 2025 May 31, 2025 Cash and Cash Equivalents $33,138 $35,901 Accounts Receivable $27,393 $24,117 Inventories, net $105,167 $102,799 Total Assets $201,766 $195,835 Total Debt $0 $0 Total Liabilities $43,291 $39,176 Shareholders’ Equity $158,475 $156,659
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Capital Allocation Capital Allocation Strategies Focused on Supporting Long-Term Growth Opportunities Investing in Infrastructure and IT Systems • Invested in facility renovations in FY2023 and FY2024 to support the growing demand for Green Energy Solutions (GES) products • Continual enhancements of IT infrastructure to support global opportunities Organic Growth Initiatives • Since FY2021, Richardson Electronics has invested in research & development, onboarding talented engineers, and enhancing its sales teams Sustained Dividend • The Company has paid out a regular quarterly cash dividend to common shareholders since 1990 Cash Flow Management • Maintain a healthy level on cash on the balance sheet • Approximately 70% of cash on Richardson's balance sheet is spread out across 23 of the Company’s foreign subsidiaries • Focused on converting inventory to cash in FY2026 Selective Multi-Year Acquisition Strategy • Targeted M&A that aligns with strategic growth initiatives Debt free balance sheet allows for strategic deployment of capital
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Backlog • Total backlog at the end of Q2 FY2026 was $135.7 million versus $134.7 million at the end of Q1 FY2026, and $59.5 million in FY2019. • Backlog up more than 125% since FY2019 • Core GES segment backlog growth highlights continued strength in underlying demand for both new products and existing programs • The Company’s sales pipeline remains solid; however, the timing of new orders can vary quarter-to-quarter. Current backlog also includes faster turns than prior years, reflected in the simultaneous decline in inventory. $- $50 $100 $150 $200 $250 FY2019 FY2020 FY2021 FY2022 FY2023 FY2024 FY2025 Q2 FY2026 Total Company Backlog ($ in millions)
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Appendix: Non-GAAP Reconciliation
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Non-GAAP Net Income: Non-GAAP Net Income is net (loss) income, adjusted to exclude a one-time loss on the sale of assets of the Company’s Healthcare business and to exclude a state tax valuation allowance adjustment. Reconciliation of Non-GAAP Net Income Twelve Months Ended May 31, 2025 Net loss reconciliation Net loss (1,143)$ Loss on sale of healthcare assets and other charges 3,755 Valuation allowance adjustment 617 Non-GAAP net income 3,229$