While we acknowledge revenues will be lower in FY ‘24 than previously anticipated, we maintain our optimistic outlook and remain committed to our long-term strategy. We continue to expand our product roadmap for green energy solutions. We are adding new customers for wind, electric vehicles, and rail and the applications that take advantage of energy transition initiatives underway across many geographies. While we're in the early innings of this transformation, we have quickly developed a compelling roadmap of products, technologies, and are establishing Richardson Electronics as a leading provider of innovative engineered solutions for global green energy markets. Activity across all our business remains extremely strong, and specifically for the green energy’s business.

Our pipeline of potential projects continues to increase. In addition to public and private energy transition initiatives that are underway, we believe that the Inflation Reduction Act of 2022 will create further opportunities for the company. One recent example was a new order from a US-based technology company that's using our 100 kilowatt generators to power a pilot reactor to make crystalline diamond materials for high-tech applications. Under the Inflation Reduction Act, this customer is applying for a grant to build a multi-reactor factory which will require significant number of 100 kilowatt generators. We believe other wind and electric vehicle and rail customers will benefit from the Inflation Reduction Act, which we expect to support our higher sales forecast.

As our GES business gets to scale in the coming quarters and years, much of our near-term new business is project-based and timing is not always easy to predict. I want to stress that we've not lost any opportunities and remain focused on capitalizing on market opportunities supported by the Inflation Reduction Act and other energy transition initiatives globally. We're also focused on adding suppliers that will fill our technology gaps. These relationships are critical to our business model as our partners often support new engineered solution opportunities for the company that drive higher and more profitable sales. Our balance sheet remains strong with nearly $23 million in cash and no debt. Inventory increased in the quarter in line with purchases of Talus products, which would support our profitable to business, as well as long lead time capacitors that are required to support our green energy growth initiatives.

The balance of our inventory remained flat. And the transit inventory was down, indicating we are reducing inventory purchases in line with sales. With this introduction, I'd like to turn the call over to Bob Ben, our Chief Financial Officer, to review our second quarter financial performance in detail. Then, Greg, Wendy, and Jens will discuss our numerous opportunities within our business units, including the significant number of new products, programs, and customers that drive our optimism for future growth.

Robert Ben: Thank you, Ed, and good morning. I will review our financial results for our second quarter of fiscal year 2024, followed by a review of our cash position. Net sales for the second quarter of fiscal 2024 were down 33.0% to $44.1 million compared to net sales of $65.9 million in the prior year second quarter. PMT sales decreased by $9.3 million from last year's second quarter, driven primarily by a decline in manufactured products for semiconductor wafer fabrication equipment customers. Sales for GES declined $9.7 million from last year's second quarter, primarily due to lower sales of ultracapacitor modules for wind turbines as a result of the project-based nature of this product line. Canvys sales decreased by $2.8 million, primarily due to customer pushouts in North America.

However, Canvys backlog increased, reflecting higher overall demand. Richardson healthcare sales were comparable to the second quarter of fiscal 2023, as higher CT tube and parts demand offset lower system sales. Consolidated gross margin for the second quarter was 28.4% of net sales compared to 33.2% in last year's second quarter due primarily to product mix and under-absorption. Without under-absorption of the company's manufacturing facility, management estimates that the company's consolidated gross margin for the second quarter of fiscal 2024 would have been 31.3%. PMT's gross margin decreased to 28.5% from 34.5%, primarily due to product mix, and $0.9 million of manufacturing under absorption. GES gross margin decreased in the second quarter of fiscal 2024 to 29.2% from 33.9% in the prior year's second quarter due to product mix.

Healthcare's gross margin decreased to 14.8% in the second quarter of fiscal 2024 compared to 23.2% in the prior year second quarter as a result of a $0.3 million increase in manufacturing under absorption. Canvys gross margin increased in the second quarter of fiscal 2024 to 33.5% from 29.7% in the prior year second quarter because of product mix and lower freight costs. Operating expenses were $14.5 million for the second quarter of fiscal 2024, compared to $14.7 million in the second quarter of fiscal 2023. The decrease in operating expenses resulted from lower incentive expenses, partially offset by higher employee compensation expenses. The company reported an operating loss of $2.0 million for the second quarter of fiscal 2024 versus operating income of $7.2 million in the second quarter of last year.

Other expense for the second quarter of fiscal 2024, including interest income and foreign exchange, was $0.3 million compared to other expense of $0.1 million in the second quarter of fiscal 2023. Income tax benefit was $0.5 million or a 21.6% effective tax rate versus an income tax provision of $1.5 million or a 21.5% effective tax rate for the second quarter of fiscal 2023. Net loss for the second quarter of fiscal 2024 was $1.8 million or $0.13 per diluted common share compared to net income of $5.5 million or $0.39 per diluted common share in the second quarter of fiscal 2023. Turning to a review of the results for the first six months of fiscal year 2024. Net sales for the first six months of fiscal year 2024 were $96.7 million, a decrease of 27.5% from $133.5 million in the first six months of fiscal year 2023, which reflected lower sales across our business segments.

Gross margin decreased to 30.8% from 33.6%, primarily reflecting product mix and manufacturing under-absorption in PMT, as well as increased scrap expense and manufacturing under-absorption in healthcare, which was partially offset by a favorable product mix and lower freight costs for Canvys. Operating expenses were $30.3 million for the first six months of the fiscal year, which represented an increase of $1.4 million from the first six months of the last fiscal year. The increase was due to higher employee compensation expenses associated with the higher staffing levels in fiscal 2023 combined with severance costs relating primarily to healthcare's reduction in staff. Operating loss for the first six months of fiscal year 2024 was $0.5 million as compared to an operating income of $16.0 million for the first six months of fiscal year 2023.

Other expense for the first six months of fiscal 2024, including interest income and foreign exchange, was $0.1 million, as compared to other expense of $0.5 million for the first six months of fiscal 2023. Income tax benefit was $0.1 million or an effective tax rate of 16.5% during the first six months of fiscal 2024 versus an income tax provision of $3.6 million or an effective tax rate of 23.4% in the prior year's first six months. The company reported a net loss of $0.6 million or $0.04 per diluted common share for the first six months of fiscal year 2024, versus net income of $11.9 million, or $0.83 per diluted common share for the first six months of fiscal year 2023. Moving to a review of our cash position. Cash and investments at the end of the second quarter of fiscal 2024 were $22.8 million, compared to $24.1 million at the end of the first quarter of fiscal 2024.

US cash and investments were $8.8 million at the end of the second quarter of fiscal 2024 versus $8.4 million at the end of the first quarter of fiscal 2024. Capital expenditures were $1.5 million in the second quarter versus $1.3 million in the second quarter of fiscal year 2023. Approximately $1.1 million related to investments in manufacturing, including facility expansion, and included final costs for the renovation of our office space. We paid $0.8 million in cash dividends in the second quarter of fiscal year 2024. In addition, based on our current financial position, our Board of Directors declared a regular quarterly cash dividend of $0.06 per common share, which will be paid in the third quarter of fiscal 2024. As of the end of the second quarter of fiscal 2024, the company had not made any draws on its $30 million revolving line of credit with PNC Bank.

Lastly, the company's Board of Directors created new ownership requirements for outside directors. This includes owning a minimum of $150,000 of our stock after a three-year period. Now, I will turn the call over to Greg, who will discuss the results for our PMT and GES business groups.

Greg Peloquin: Thank you, Bob, and good morning, everyone. As expected, the fiscal 2024 second quarter was challenging for our Green Energy Solutions and Power & Microwave Technologies groups due to a fluid economic environment, the timing of some project-based orders, and a decline in sales in the semiconductor wafer fab market. For our GES business in particular, our second quarter results reflect the startup nature of any new business. As a reminder, we are in the infancy of our GES growth strategy, having started to pursue new GES opportunities only two years ago with new designs and customer requirements establishing manufacturing and test and also launching beta site testing, we expect sales to fluctuate as we get to scale and develop more predictable revenue streams.

However, in a short amount of time, we have designed numerous new products, received several patents, and shipped over $77 million to an ever-growing list of key customers, with more than $35 million in backlog going into calendar year 2024. We expect significant bookings to be received in Q3 and Q4 of FY ‘24. So needless to say, we continue to be very excited about the next three years. Last year, GES benefited from several large projects, including electric locomotive development and major owner operators of GE wind turbines such as Nextera, Enel, and Invenergy. Given the project nature of our GES business, revenue from these products are not necessarily consistent quarter to quarter. In fact, many of our customers over the past three months completed calendar year 2024 budgets, including our product and will roll out purchases in the first half of calendar 2024.

In weekly conversations with our major customers, they note it is only a matter of time until new orders are placed. Our customers repeatedly tell us we have maintained our market share for our core GES applications and have identified new product opportunities. And the decline in revenue we are experiencing is purely a timing issue. In fact, our customer pipeline and the number of opportunities continues to increase as we look to take advantage of significant energy transformation projects globally. Our GES and PMT backlogs remain strong at over $100 million. Given our inventory position, we believe we will ship many incoming orders from stock, which we expect will convert working capital into cash in the coming quarters. We are managing our GES business to support our customers' needs when they are ready.

So with that introduction, let's look at the second quarter performance of GES and PMT groups in more detail. GES sales were $2.6 million in the quarter, down from $12.3 million in the prior year's record second quarter. The year-over-year decline in GES sales was due to timing on several major project-based opportunities. Last year, GES revenues included the first phase of rollouts to our wind turbine customers and prototype builds for our EV locomotive customers. During the quarter, we added several major new customers such as BP Energy, EDF Energy, and EDP Renewables. I am pleased to report that 90% of our ULTRA3000 sales in Q2 were with new wind customers. We continue to increase our market share with the customers needing our niche patented green energy products.

We believe Phase 2 rollouts for our wind customers will begin in Q3 and Q4 of FY ’24 as many of these customers recently completed their 2024 budgeting process. The forecast they have provided point to growing orders, which we believe will drive stronger GE sales in our fiscal third and fourth quarters. We continue to beta site our patented pending ULTRAUPS 3000, which replaces lead-asset batteries in the UPS system at the base of the wind turbines. The ULTRAUPS 3000 will be used by Siemens and by other owner operators of GE wind turbines going forward. Tests are going well, and we have led to important improvements in the product. We're also testing the ULTRAPEM 3000 which supports other wind turbine platforms such as Suzlon, Senvion and Nordex.

This is helping us expand our market outside of North America. One major program for the ULTRAPEM or multi-brand is beta testing with Suzlon in an OEM and replacement basis. This opportunity is for more than 7,000 turbines in India alone and several thousand more in North America. This product is also in final testing with several owner operators in Latin America and North America. We believe initial ULTRAPEM orders will begin in Q4 of FY ‘24. In EV locomotive segment, due to supply chain issues for piece parts from our suppliers, our superstructure builds for Long Island railroad and BNSF electric locomotives will be completed in late Q3 and Q4 of this fiscal year. We anticipate Phase 2 for our EV locomotive customers will be in the third and fourth quarters of calendar 2024.

We also have beta orders for our patented ULTRAGEN 3000 starter module with two large diesel and electric [motive] (ph) manufacturers. It is important to note that these are exclusive with both manufacturers. We continue to identify other niche applications for the ULTRAGEN 3000. We are in beta testing with several refrigeration truck manufacturers where ULTRAGEN is replacing lead acid batteries. There are numerous other markets that can benefit from this solution, such as construction equipment, excavators, loaders, and backhoes. These are longer-term opportunities that we expect to add incremental growth in the future periods as we leverage our leadership position, utilizing ultra capacitors and other related technologies as power sources across various applications with many large companies throughout the world.

In summary, we believe we will begin to see sequential revenue growth in Q3 and Q4 within our GES business, driven by new products, customers, and technology partners, all supported by the forecast and backlog from these project-based customers. I want to stress that we have not lost any market share. In fact, we continue to increase our market share with new products, applications, and customers and our recent performance is a result of timing issues and the emerging nature of our GES business. So turning to PMT, which includes EDG, our legacy tube business, and PMG, our Power & Microwave Components Group, sales decreased 22.9% to $31.3 million. This decline was mainly due to continued slowdown in our semiconductor wafer fabrication equipment business.

The semiconductor wafer fabrication business has always been cyclical. We anticipated the slowdown in 2023, but maintain our expectations that the business will recover in the second half of calendar 2024. This frustration with the cyclical downturn of the wafer fabrication business was offset by strong double-digit bookings growth in our RF and wireless business, mainly supporting wireless infrastructure and communication customers. As mentioned, our engineered solution strategy is led by our global technology partners. We continue to add partners who fill technology gaps in our offering and support our growth. Often through these partnerships we identify opportunities for new products that we design and manufacture in-house. This increase the value we provide customers and allows us to capture more revenue while expanding and diversifying our customer base.

These long-term supplier relationships are extremely strong. And when appropriate, we work with them on strategic long-term purchases to maintain appropriate levels of supply. We negotiate special payment terms and shipping schedules to help improve cash flow. In addition, having inventory at hand allows us to capture and maintain market share. We collaborate with both our customers and suppliers and leverage our customers' forecast to help us strategically invest in inventory, ensure we can meet our customers' needs. Our growing customer base and strong relationships with these customers and suppliers, using our version of a customer intimacy model, helps us develop new products and opportunities with our existing customer base. We also continue to invest in our infrastructure to support our growth where needed.

We're bringing on talented design and field engineers and making investment to enhance our manufacturing capabilities. Our growing in-house design and engineering manufacturing teams are doing a great job supporting increased demand for current products and new product designs. With this team, we will continue to identify, develop, and introduce new products and technologies for green energy and other power management and microwave applications. I cannot stress enough the value of Richardson Electronics model to our customers and suppliers. Our unparalleled capability and global golden market strategy are unique to the power and energy in RF, microwave and green energy markets. We developed a strong business model including legacy products and new technology partners that fit well with our engineered solutions capabilities.

Through our steadfast and creative focus on customers, we will continue to excel by taking advantage of opportunities when they arise. The execution of our strategy has never been better. There's no question our customers and technology partners need Richardson's capabilities, products and support more than ever. And with that I'll turn it over to Wendy Diddell to discuss Richardson Healthcare.

Wendy Diddell: Thanks Greg. Good morning everyone. Second quarter sales for the healthcare division were $2.9 million, down less than 1% compared to the second quarter of last year and improved over our most recent first quarter. CT tubes and part sales were up versus the prior year's second quarter, while system sales were down due primarily to timing of cash receipts from customers in Latin America. In the quarter, we benefited from sales of our repaired Siemens Straton Z tubes. Healthcare's gross margin in the quarter was very low at 14.8% compared to 23.2% last year. The reason for the decline in margin was due to under-absorption associated with our decision to produce fewer ALTA tubes in the quarter as well as higher scrap costs.

Throughout prior quarters, healthcare inventory has increased due in large part to our growing supply of ALTA tubes. These are the replacement tubes for [CAT] (ph) and CT scanners. We decided at the end of the quarter to reduce our staff and temporarily suspend ALTA tube production which will allow us to sell off inventory. We did retain critical resources who will focus on continual product design improvements and cost reduction opportunities, but reduced production may continue to drive our overall gross margin lower than anticipated. We did not lay off resources working on the repaired Siemens tube program. In fact, we are supporting the development team by reallocating some of the employees who were focusing on the ALTA tubes. We continue to make excellent progress with the Siemens program and with a more focused team, anticipate this to continue.

The Siemens repair program includes four tube types, the Straton Z, MX, MXP, and MXP46. The repaired Straton Z is in full production and performing well in the field. Straton Z sales are just starting to ramp up as we have a steadier flow of production. The first repaired MX series tubes are in test and provided our beta testing goes well, we anticipate introducing these to the market later in the third quarter. As we mentioned last period, sales of the MX series will be limited due to supply until FY ‘25. In the quarter, we also received our GMP certification in Brazil. GMP stands for Good Manufacturing Practices. These are the standards set by the National Agency of Health Surveillance, or Anvisa, in Brazil. This paves the way for us to export our tubes to a specific customer in Brazil who will reload and sell our ALTA tubes in-country.

We anticipate the first shipments to this customer will be made in the quarter with limited sales in the fiscal year. Rest assured, we continue to monitor healthcare's financial performance with the goal of achieving a break-even point in the fourth quarter. This will be more of a challenge with lower production going through the plant, but we are doing the right things to balance our investments with opportunities in the business. I will now turn the call over to Jens Ruppert to discuss the results for Canvys.

Jens Ruppert: Thanks, Wendy, and good morning everyone. Canvys engineers, manufactures, and sells custom displays to original equipment manufacturers in the industrial medical markets throughout the world. Canvys’ sales for the second quarter of fiscal 2024 reflects certain customer pushouts primarily in North America. As a result, sales were $7.3 million for the second quarter compared to $10.1 million for the second quarter last year. On the positive side, we finished the quarter with a very strong backlog of $48.2 million which increased by $5.6 million from the first quarter of fiscal 2024. Gross margin as a percentage of net sales improved to 33.5% during the second quarter of fiscal 2024 compared to 29.7% during the second quarter of fiscal 2023.

The increase in cross-margin was primarily related to a more favorable product mix and lower freight costs. During the quarter, we received several new orders from both existing and first-time medical OEM customers. Some of these applications include medical device controls within the operating room, surgical navigation, laser ablation, radiotherapy, laboratory equipment, super pulsed laser systems, robotic-assisted surgery, and microscopy. In the non-medical space, our products are used in a variety of commercial and industrial applications. This includes displays used in the public transportation space, human-machine interface applications, and teleprompting, talent monitors, and clocks used in the broadcast market. Over the past couple of months, we have seen more caution in some of our customers' ordering behaviors.

With a rapid rise in interest rates, continued global weakness, and expanding geopolitical uncertainty, our OEM customers have seen a slowdown in ordering, particularly in industrial and more recently, some medical applications. Given the strong growth drivers in the various imaging markets and our customers' levels of excitement towards next generation products, we see these current dynamics as temporary. Design cycles at Canvys are long, potentially causing sales to vary quarter by quarter. However, we remain focused on adding new customers and programs globally as we leverage and promote our best-in-class design, engineering, and service capabilities. Despite a more cautious macro outlook over the near term, we believe sales will reaccelerate towards the end of the fiscal year, supported by our growing backlog and the number of projects currently in the engineering stage.

From the variety of customers and applications as well as the value of orders from existing and new customers, it is clear we offer our global customers outstanding products and localized service. While our sales organization stays focused on new opportunities, I stay focused on improving the operating performance of the division, maximizing cash flow, managing inventory, and improving Canvys’ profitability is an ongoing priority as we continue to work closely with our partners to meet the demand of our customers. I will now turn the call back over to Ed.

Edward Richardson: Thanks, Jens. We appreciate your team's efforts to manage customer [push-outs] (ph) without sacrificing our long-term partnerships. As you heard from Greg, Wendy, and Jens, there's much to be excited about in Richardson Electronics. We remain committed to our long-term strategy, and we'll continue investing in our growth initiatives with an emphasis on engineered solutions that improve sustainability. We'll protect our cash and focus on improving profitability and inventory turns in the coming quarters. We're also committed to our shareholders and are pleased to announce we've implemented a program requiring our outside directors to purchase shares and maintain ownership of our stock. At this time, we'll be happy to answer your questions.

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