RICHARDSON ELECTRONICS, LTD. — Call Transcript 2025

Thank you for standing by. Welcome to the Richardson Electronics earnings call for the first quarter of fiscal year 2026. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question-and-answer session. To ask a question during the session, you will need to press star one one on your telephone. You will then hear an automated message advising that your hand is raised. To withdraw your question, please press star one one again. Please be advised that today's conference is being recorded. I would now like to turn the call over to your speaker today, Ed Richardson, CEO. You may begin. Good morning, and thank you all for joining Richardson Electronics conference call for the first quarter of fiscal year 2026. We appreciate your continued support and interest in Richardson Electronics. Joining me today are Bob Ben, Chief Financial Officer; Wendy Diddell, Chief Operating Officer; Greg Peloquin, General Manager of our Power and Microwave Technologies Group, which includes Green Energy Solutions; and Jens Ruppert, General Manager of Canvys. As a reminder, this call is being recorded and will be available for playback. I would also like to remind you that we'll be making forward-looking statements. They're based on current expectations and involve risks and uncertainties. Therefore, our actual results could be materially different. Please refer to our press release and SEC filings for an explanation of our risk factors. In Q1 of FY 2026, total sales were $54.6 million, up from $53.7 million in Q1 of last year. Driven by sales growth in both PMT and Canvys, PMT delivered notable year-over-year sales growth driven by continued strength in our semiconductor and RF power segments. It's important to note that sales growth was partially offset by the inclusion of our healthcare business in both the current and prior quarters. As a reminder, we sold our healthcare business in Q3 of FY 2025, so this will impact our year-over-year comparisons through the end of Q3 this year. The healthcare engineering and manufacturing team is making good progress, finishing production of ALTA tubes and finalizing repair processes for the Siemens tubes, which should result in positive operating contribution toward the end of FY 2026. In our GES business unit, we were very pleased with the year-over-year growth in the wind segment. The performance provides us with growth evidence that the policies from the current administration are not hurting demand of our alternative energy solutions. We believe our wind business is protected because we're pursuing programs strictly on a land-based turbine, support global customers, and provide solutions that improve the performance and efficiency of the existing fleet. While overall sales were down slightly in GES, this was driven by a large one-time order in our EV rail sector in the first quarter of the last year that did not repeat this year. Backing out this sale, GES would have been up quarter-over-quarter. A strategic priority of the company is engineered solutions, which are products we make ourselves in LaFox. The strategy focus, along with improved manufacturing utilization in the quarter, contributed to the higher gross margin versus prior year. The long-term investment in our global footprint is also a strength, helping us better manage the tariff landscape. Finally, we're pleased to report that we generated positive operating cash flow in the quarter, marking six consecutive quarters. Our cash position remains strong at $35.7 million, providing us with flexibility to support both our ongoing operations and strategic growth opportunities. I'll now turn the call over to Bob Ben, our Chief Financial Officer, who will provide a detailed review of our first quarter results and capital position. Following Bob's remarks, Greg and Jens will provide updates on our business units, and then Wendy will follow up with a recap on our future growth strategies. Thank you, Ed, and good morning. I will review our financial results for our first quarter of fiscal year 2026, followed by a review of our cash position. Consolidated net sales for the first quarter of fiscal 2026 increased 1.6% to $54.6 million compared to net sales of $53.7 million in the prior year's first quarter. When excluding healthcare, for which the majority of assets were sold in January 2025, net sales increased by 6.8%. Please note that healthcare results, including prior periods, are consolidated into the PMT segment beginning this quarter. This was our fifth consecutive quarterly year-over-year increase in sales. First quarter net sales growth was led by a 2.8% increase in PMT sales. Excluding healthcare, PMT sales were up 10.5% and were due to higher demand from the Company's semiconductor wafer fab customers, as well as our legacy power grid tube product lines. Canvys sales increased 8.3%, which reflected improved market conditions in Europe. Partially offsetting these increases was a 10.2% decrease in sales for our GES business unit. While revenues in the wind segment increased, they were offset by the non-recurrence of a large EV locomotive order from the prior year's first quarter. Consolidated gross margin for the first quarter was 31.0% of net sales compared to 30.6% during the first quarter of fiscal 2025. The 40 basis point increase in consolidated gross margin was primarily due to margin improvement in both PMT and GES. PMT's gross margin increased to 31.3% from 30.1% as a result of a favorable product mix and improved manufacturing absorption. GES gross margin increased to 29.6% from 29.4% due to product mix, including a higher percentage of products we manufacture in LaFox. Lower gross margin for Canvys partially offset the improvement in consolidated gross margin. Operating expenses as a percentage of net sales improved to 29.2% for the first quarter of fiscal 2026 compared to 30.0% in the first quarter of fiscal 2025. As a result, operating income was $1.0 million for the first quarter of fiscal 2026 compared to an operating income of $0.3 million in the prior year's first quarter. Other income totaled $1.4 million for the quarter, which was $1.1 million higher than the first quarter of fiscal 2025. The increase from the prior year's first quarter was mainly due to a non-recurring gain of $0.9 million from a confidential contractual settlement. Net income was $1.9 million for the first quarter of fiscal 2026 compared to $0.6 million in the first quarter of fiscal 2025. Earnings per common share diluted were $0.13 in the first quarter of fiscal 2026 compared to $0.04 in the first quarter of fiscal 2025. EBITDA for the first quarter of fiscal 2026 was $3.3 million versus $1.7 million in the prior year's first quarter. Please note that EBITDA is a non-GAAP financial measure, and a reconciliation of the non-GAAP item to the comparable GAAP measure is available in our first quarter fiscal year 2026 press release that was issued yesterday after the market closed. Turning to a review of our cash position, cash and cash equivalents at the end of the first quarter of fiscal 2026 were $35.7 million compared to $35.9 million at the end of fiscal 2025. Cash flow provided from operations was $1.4 million compared to cash flow provided from operations of $0.4 million in the first quarter of the prior year. Capital expenditures of $1.0 million in the first quarter of fiscal 2026 were primarily related to our manufacturing business, facilities, improvements, and IT systems versus $0.9 million in the first quarter of fiscal year 2025. We paid $0.9 million in the first quarter for cash dividends. 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 second quarter of fiscal 2026. As of the end of the first quarter of fiscal 2026, the company had no outstanding debt on its revolving line of credit with PNC Bank. In addition, we have extended this credit agreement through October 6, 2028, with similar terms and a $20 million borrowing limit. Now I'll turn the call over to Greg, who will provide more details for our PMT and GES business groups. Thank you, Bob, and good morning, everyone. PMT and GES are key components of our multi-year growth plan. Coming out of FY 2025, we had a strong backlog, launched several new products, expanded our customer base, and advanced multiple development programs from beta testing to pre-production. Building on that positive momentum, in Q1 fiscal year 2026, PMT, excluding healthcare, grew to $37.8 million, a 10.5% increase over prior year, and a 5.1% increase over Q4 fiscal year 2025. GES sales were $7.3 million, up 35.5% over fiscal Q4 2025, and down 10.2% year-over-year due to a multimillion-dollar EV locomotive billing that did not repeat this year and without which GES would have been up in the quarter versus prior year's first quarter. However, on a positive side, the core wind turbine business grew 86.1% over prior year and 16% over prior quarter, supported by new customers, global expansion, and new products. Our pitch energy modules and related wind energy products lead GES quarter-over-quarter growth. We continue to gain market share with our end customers by developing new products and solutions that they are incorporating. Today, we serve dozens of wind turbine owner-operators, including exclusive partnerships with the top four owner-operators of GE wind turbines, RWE, Inver Energy, Enel, and NextEra. We also saw growth in our new multi-brand PEM turbine platforms. We continue to grow this program internationally, expanding into Europe and Asia with new products for other turbine platforms such as Suzlon, Senzion, Nordics, and SSB. We have now received orders from customers in Australia, India, France, and Italy. Our GES growth strategy centers around power management applications. We rapidly designed multiple products, secured patents, and built a strong global customer base and partnerships. Our success is evident in our growing pipeline as we capitalize on numerous growth opportunities to support new power management requirements, significant energy transformation, and wind turbine repowering projects. We're entering Q2 FY 2026 with solid momentum. We've recently added key technology partners such as KEBA, Goshen, and Wolong, who will play critical roles in both wind power management and energy storage. Key initiatives include faster design through production cycles, supported by a new design center in Sweetwater, Texas. Sweetwater has one of the largest concentrations of power management and wind turbine engineers in North America. Expanding our design team to accelerate enhanced design cycles prior to transitioning the work to our world-class manufacturing and test group in LaFox is one of our main strategic priorities this year. We expect to have the Sweetwater, Texas design center operational in Q2 FY 2026. Turning to Power and Microwave Technologies Group, or PMT, which includes Electron Device Group, our legacy power grid tube products and semiconductor wafer fab equipment business, and RF and Power and Microwave Components Group, or PMG. In the quarter, sales growth was led by increased demand in both our RF and microwave components business. As we see growth in RF and wireless applications such as SATCOM and military applications, including radar and drone technology, we also saw continued growth in the fourth straight quarter among our semiconductor wafer fab manufacturing customers. Looking ahead, we're excited about the strategic initiatives across PMT and GES, including our Energy Storage System, or ESS, program, global expansion of our green energy products, and new technology partnerships. While we are navigating a higher degree of uncertainty associated with the impacts of tariffs and market conditions, we are pursuing opportunities that may come from these disruptions. We're investing in infrastructure, expanding our design and field engineering teams, enhancing our in-house design and manufacturing capabilities to support growth demand and innovation. Our field engineering team continues to identify new customers and opportunities. Our global capabilities and global go-to-market strategy set us apart from our competition in the power management, RF microwave, and green energy markets. We've developed a business model that combines legacy products with new technology partners and solutions, aligning with our growth strategy to deliver engineered solutions to a global customer base. This model differentiates us from our competition. Our GES products and technology partners support our niche product strategies. As it appears, federal subsidies will be harder to get under this administration. Looking at our new ESS project and strategy, we are focused in key states that will continue offering large subsidies, such as Illinois, Massachusetts, and California. We are expediting our efforts to expand our global market penetration of our power management products for green energy applications, focusing particularly on Europe and Asia, as currently about 70% of our GES sales are in North America. We are working on these initiatives alongside marketing our services to companies who need partners in the U.S. to manufacture, test, and support products currently made in other countries. We acknowledge that there are a lot of moving parts and unknowns in this market right now, but we have successfully used our global resources and capabilities to mitigate the effect of situations like this in the past. In summary, we remain optimistic about our growing project-based business, even though it remains hard to forecast. We continue to increase our technology partners, design opportunities, and engineering staff. We have new technology partners that fill technology gaps. We have a proven strategy of identifying opportunities in this multi-billion-dollar market we serve. As a result, we feel FY 2026 will be another growth year for both PMT and GES. With that, I'll turn it over to Jens to discuss Canvys. Thanks, Greg, and good morning, everyone. Canvys engineers manufacture and sell custom displays to original equipment manufacturers across global industrial and medical markets. It is our mission to deliver high-quality display solutions tailored to our customers' needs. Canvys reported revenue of $8.3 million in the first quarter of fiscal year 2026, an increase from $7.6 million in the same quarter of the previous year. Our gross margin as a percentage of net sales decreased to 30.9% from 34.3% in the first quarter of fiscal year 2025, primarily due to product mix and higher inbound freight costs. The backlog at the end of the first quarter of fiscal 2026 remains strong at $38.4 million, providing a robust foundation for future business. During this most recent quarter, Canvys secured orders from both repeat and new medical OEM customers for a range of applications. Our primary focus remains on robotic-assisted surgery, navigation, endoscopy, and human-machine interface solutions for the control of medical devices. Furthermore, our solutions are widely utilized in various commercial and industrial applications. For instance, our products enhance passenger information systems in trains and buses and improve HMI technologies used in printing, vending, milling, and packaging equipment. Our initiatives focus on increasing Canvys's visibility and market leadership by seeking new opportunities, building customer relationships, and collaborating within the industry to drive growth. Looking ahead, while the business is still project-focused and can therefore vary quarter-over-quarter, we are cautiously optimistic about improving demand in our markets. Positive indicators such as increasing requests for quotes and encouraging customer feedback suggest steady growth. Our dedicated sales team continues to explore new opportunities, while I focus on implementing strategic plans to ensure sustainable growth and deliver long-term value for our shareholders. I will now turn the call over to Wendy. Thank you, Jens, and good morning, everyone. While our healthcare business is now included in PMT, I want to provide some additional color as we go through this transition period over the next several quarters. As a reminder, we sell CT tubes exclusively to DirectMed as provided under the terms of the January 2025 sale and distribution agreements. I am pleased to convey we are making excellent progress finalizing production of our ALTA tubes. We've also made good strides over the last quarter, validating new equipment and materials required to improve our processes for the repaired Siemens tube types. Comparable healthcare sales throughout most of FY 2026 will be lower than prior year, given DirectMed acquired the healthcare parts business. The sale concluded in January 2025, so this unfavorable comp will continue through Q3 FY 2026. We anticipate the financial impact of the retained CT tube business will turn positive in the fourth quarter of FY 2026 or shortly thereafter. Last quarter, after the sale of Richardson Healthcare, we discussed our focus on accelerating growth and improving efficiency. In the first quarter, we were pleased to see year-over-year growth in PMT and Canvys, as well as the wind energy portion of GES, reflecting our ongoing investments in these sectors. Of particular importance is the success we continue to see with our engineered solutions growth strategy. We also see some initial benefits from the Big Beautiful Bill. There are implications in the bill that are fostering wind turbine repowers, which lift sales of our wind turbine modules, as well as sales of products from our technology partners. Wind management companies need to upgrade their towers to receive comparable tax benefits in coming years. In the quarter, we announced our participation in the REV Illinois program, which provides significant tax credits in return for investment in alternative energy technology development in the state of Illinois. We're making progress developing a world-class battery energy storage demonstration site at our LaFox facility. As we've mentioned before, the demand for battery energy storage continues to accelerate, and our turnkey solutions position us to capitalize on that growth. Our Made in America marketing campaign recently kicked off with the addition of a dedicated business development manager. We are highlighting our capabilities on our website and through trade show attendance. In addition, we are leveraging our existing sales organization and global customer relationships throughout the company. Finally, we are seeing increasing demand for our engineered solutions in the semiconductor wafer fab equipment market. Our large customers in this segment indicate sustained growth relating to the ongoing benefit of AI on equipment demand throughout the world. Rest assured, the management team remains focused on efficiency and cash generation as well. The end of the significant inventory growth in support of one of our largest suppliers, who will soon terminate production of power grid tubes, is in sight. In this regard, we are working closely with other partners to ensure ongoing sources of supply, but we are in a good inventory position to execute this strategy over several years. Longer term, we remain committed to driving growth both organically and through strategic acquisitions. We're being thoughtful in our approach. We are looking for the right opportunities to utilize our capabilities and accelerate our growth while making full use of our global infrastructure. We believe our current strategic initiatives will drive revenue and profitability growth over the next several years, while we consider longer-term strategic acquisitions that further enhance our business. I will now turn the call back to Ed. Thanks, Wendy. In closing, our results this quarter demonstrate the strength of our strategy and the resilience of our business model. By sharpening our focus on repeatable sales, driving strong cash flow, and building on our diversity across power management and alternative energy solutions, we're positioning the company for long-term success. At the same time, we remain disciplined in our commitment to improving profitability. These priorities give us confidence in our ability to deliver sustainable value for our customers, shareholders, and employees as we move forward. We'll open the questions now. Certainly. Ladies and gentlemen, due to time constraints, we ask that you please limit yourself to one question and one follow-up. Again, we ask that you please limit yourself to one question and a follow-up until we have all had a chance for a question, after which we will answer additional questions from you as time permits. As a reminder, to ask a question, please press star one one on your telephone and wait for your name to be announced. Our first question will be coming from Robert Brooks of Northland Capital Markets. Your line is open, Robert. Hey, good morning, guys. I wanted to ask you on where we're at with the ULTRA3000s getting onto GE's approved aftermarket vendors list. On your fourth quarter call earlier this summer, you had said that you did a final test in June and the engineering team sent it to GE Legal and it was sitting there. All indications were that the service agreements were not going to be jeopardized if the ULTRA3000s are used. I just wanted to hear where that's sitting or any new developments on that. Yeah, hi Bobby. They update me every week. We actually talked to GE about other things, this included. We are in communication with them. Their engineering team has signed off on it, and the last communication, which was last week, was that it's final signatures from legal. They are still waiting on it, and it was promised to us here in the next week or two. That is the status of it. Once we get that final signature from their legal team, we will send them a number of units. They will test them, mainly for safety, not for function, but for safety because their installers will be working with it. Once that is done, they will approve it. Along with that, not only are we pushing, if you will, GE, but also two of our largest owner-operators are also pushing it because they have both TSAs and their own repair. The short answer, which I just went long on, is we expect it to be signed in the next couple of weeks. They will do the audit of it for quality safety, and we fully expect sign-off here in Q2 at some point. Got it. The semi-fab sales were up 52% year-over-year, which was great to see. I just wanted to make sure I'm thinking about it right. Wasn't 1Q last year we were at like a trough level for those sales? The follow-up is, would you expect that year-over-year growth rate to continue through your fiscal 2026, or maybe at the minimum, the nominal level of semi-wafer fab sales in 1Q stay consistent through fiscal 2026? Yeah, you're correct, Bobby. Q1 of last year was the lowest quarter of the year for LAM, although they recovered very well. We don't get a lot of visibility from them. The most recent information that they put in the portal, it looks like these larger numbers they've been talking about now, which seems like a year or two, we should start seeing strong, strong growth in Q3 and Q4 of our fiscal year. We'll kind of be at the same run rate here in Q1 and Q2 with the large growth in Q3 and Q4 based on their forecast, which is a forecast. Thank you. Our next question will be coming from Anja Soderstrom of Sidoti. Your line is open. Hi, thank you for taking my question. I'm just curious with the wind rotors you noted from some conference around the world, how meaningful were them and how do they compare to the actual opportunity there? I'm sorry, could you repeat that quote? Outside the U.S., what were sales like? Yeah, so we've launched it hard to produce this product globally with our customer base. It's a smaller market than North America, but still a very strong market for us. We've been able to do a great job in introducing four new platforms, which will be more popular in Europe than GE, Nordex, Senvion, Suzlon, and SSB. We've done already in Q4 and part of Q1 alpha and beta testing with customers in Australia, India, France, and Italy. They've approved that, and we've already received orders in our Q1 from customers in those four countries. We look at this every week. If I look at the document that we track all the opportunities that we're currently working on in terms of our teams worldwide, it's getting up to two or three pages. It's active. It's just an education process to these customers that it's available. This product is available for their specific turbines. Of course, like we did with North America, you'll have alpha testing, beta testing, and then final production. I would say it's not going as fast as we'd like. Nothing ever does. We're getting some good traction expanding this capability, if you will, outside of North America. As you know, 70% of our business is currently in North America, so it's pretty much nothing but upside outside of North America. Okay, thank you. What do you expect in terms of CapEx for the year, given your expansions in LaFox and the Texas center? I'll take that one, Anya. We're estimating it'll probably be in that $5 million range, a little bit higher than last year. Last year was very low because there were some programs that were pushed into FY 2026. We'll stick with that $4 million-$5 million range. Okay, let me ask a question. Anja, real quick, on the REV Illinois program, and Greg, you can jump in here. The CapEx requirements themselves are not significant in this fiscal year. What we're looking at is some equipment that will help improve our manufacturing efficiencies and position us for new opportunities, primarily and particularly in the ESS solutions. What we'll be looking at, the REV Illinois program allows us to account for people in addition to CapEx, in addition to other R&D-related expenses. That's where we're focused on right now, making sure we've got the engineering resources we need, the program managers we need, so that when we get our facility built here in FY 2026, we'll be ready to efficiently and effectively market that. Yeah, I mean, this good example is the demo site. All that development goes towards the number that we've been to attain to get all the subsidies and rebates. Just one thing in the REV Illinois program, you know, we're going to apply for every single subsidy and tax credit we can get with this green energy program. Luckily, the state of Illinois has, even better than California, the most rebates and tax incentives for people doing wind, solar, energy storage, green energy itself. We found out about this from some local contacts. We applied. You have four years to do it, and it's approximately $8 million in total investment and a number of headcount. We have four years to do it. We're not doing things to get that credit. We're doing things to grow the business and increase shareholders' value. Our estimate is we'll hit those numbers very easily, so we might as well take advantage of it. Okay, great. Thank you. That was all for me. Thanks, Anja. Our next question will be coming from Brendan Kenny, private investor. Your line is open. Hello, can you hear me? Yes. Yes. Yes, we can hear you, Brendan. Hi. Just one quick question. For the operating income, you know, it says it was mainly due to a non-recurring gain of $0.9 million. Could you just go into a bit more detail about what that was? Hi, Brendan. This is Bob Ben. First of all, the operating income, as I stated in my remarks, was $1.0 million, and that did not include the non-recurring gain that's below in other income, just to clarify. The operating income for the quarter more than tripled from last year's first quarter. To specifically address your question on the $0.9 million non-recurring gain, as I stated in my remarks, that's from a confidential contractual settlement. Unfortunately, I'm not really allowed to say much about it other than that. Okay, I missed that. Yeah, thank you. Thanks, Brendan. As a reminder, to ask a question, please press star one one on your telephone and wait for your name to be announced. Our next question will be coming from Chip Rui of Rui Asset Management. Your line's open. Morning, guys. Good quarter. I have three questions, and maybe I'll just lay them out, and you can divvy them up. First, Wendy, your comment on the repower initiatives and the Big Beautiful Bill, could you expand on that? I think the sentiment has been kind of misplaced on you guys around wind anyway because you're not OEM. You're pretty much all aftermarket. Now that there's a potential positive from the administration on repowering, I'd just like to dig into that a little bit more. Secondly, the operating leverage looked great. On the operating income, can you just give us some thoughts on how the rest of the year will play out? Can we continue to see muted expense growth that would contribute to good leverage through the year? Last, maybe, Ed, I like the comments on kind of, I mean, clearly the semi business and PMT is a really positive thing to hear the outlook there. Maybe dig into the other side. The legacy RF business seems like it's perking up too. Maybe some details there. Thanks. Thanks, Chip. Hey, Chip, I'll just talk about the first question you had. It's a great question. You hit it on the head. You understand it very well that almost all of our business, other than Suzlon, is aftermarket. With this administration kind of removing a lot of the subsidies you get for new turbines, kind of like your old car in college, you can't afford a new one, so you refurbish and fix up your current one. That's what's going on in the term in the industry called repowering, where they, in some cases, drop the turbine to the ground and then replace everything they can, and then they'll have a turbine that's good for another, you know, 10-15 years. At that time, instead of putting lead acid batteries back into the turbines, many of our customers and some of those larger orders we got in terms of our large, you know, we had a $1.25 million hook to bill in FY 2025, was people ordering parts for this repowering program. They will put in our pitch energy modules, which will last up to 15 years, instead of the lead acid batteries. That decision by the government, which is getting a lot of press, actually, in a roundabout way, supports us and hopefully will expedite some of the large orders we have on our books in terms of pulling them in over the next two to three quarters. The last thing with that, on the Big Beautiful Bill, what Wendy was talking about, if they get it done by the end of this calendar year, they can put some of that money to the side or keep the current rebates and tax credits that they have now. We're working with a lot of our owner-operators to get their forecast between now and the end of the year. We grew 23% in FY 2025. We fully expect, based on the forecast and some of these other things, that GES will grow double digits in FY 2026. I guess operating. I'll take that one. Okay. Okay. In terms of leveraging and operating expenses, I'm looking at our forecast for the full year. It'll be up just a little bit, not a lot over FY 2025, as we invest in some of the programs that Greg has mentioned, in terms of additional engineers, additional people outside the U.S. focusing on green energy growth. Again, Chip, one of the things we do well as a company is really managing our SG&A level and keeping that increase under control. I would not anticipate a significant increase over FY 2025. Does that answer your question? Yes, just thoughts on the RF side. Right. Our RF tube business still remains about $85 million. We're going through a period where our largest supplier is actually going to exit the business over the next three to five years. A lot of that equipment and technology we own, so we're in the process of trying to determine if we move it back here or work with other tube manufacturers around the world. It has put us in a position where we built up our inventory very substantially. On the other hand, that inventory, tubes are like good or fine wine. You know, they are under vacuum and they last forever. We have no issue as far as obsolescence on the tubes, but our difficulty at this point is finding other manufacturers or making a decision to bring some of that manufacturing back here. Over the next three or four years, our inventory will go down dramatically as far as that's concerned. The business stays extremely profitable and we're pleased to be pretty much sole source on tubes around the world. Okay, that's great. Did you see, I thought you said you saw a pickup in that core business in the quarter and some more positive signs? In the tube business? I think it's just about level. What we are seeing is a pickup in the semi-fab equipment manufacturing business. You know, we follow LAM's quarterly vendor meetings and listen to them, and they're talking about a very positive increase in their business going forward. In the best year, we did about $40 million with LAM and people in that business. I think right now we're running in the low $20 million, Wendy, somewhere. We see an opportunity to grow substantially in that business going forward. On the RF solid-state side, if you bring to that, because that was business that we were in before, that also grew. We're seeing a large uptick in military, defense, RF communications, drones, and, of course, SATCOM globally to get 5G to all these remote areas. That's the business that picked up and that's where the growth was on the solid-state side. Okay, that's what I was asking. Thanks for the clarification. That sounds like that sector, the defense side, is pretty hot across the board. Do you see kind of accelerating participation into that end market? Yeah, and it's, you know, because of this global infrastructure that Ed put in place decades ago, it really is a benefit to a company like us. We're seeing a lot of the drone manufacturers are in Europe and we have a great team there. It's military too, but we're seeing also urban development, homeland security, disaster management, forest fires. I mean, drone technology is expanding very, very fast. We have some of the, if not the best, technology partners like MACOM, Qorvo, 3R Wave that have great products for that. We're participating in it and that's where the growth is on the solid-state RF and the microwave side. Okay, thank you. I would now like to turn the conference back to Ed for closing remarks. Thank you very much for following our progress and growth. We're really pleased with the performance of the company. If you have further questions, please feel free to call us at any time. Thank you very much. This concludes today's conference call. Thank you for participating. You may now disconnect.

Speaker 8: Thank you for standing by. Welcome to the Richardson Electronics earnings call for the first quarter of fiscal year 2026. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question-and-answer session. To ask a question during the session, you will need to press star one one on your telephone. You will then hear an automated message advising that your hand is raised. To withdraw your question, please press star one one again. Please be advised that today's conference is being recorded. I would now like to turn the call over to your speaker today, Ed Richardson, CEO. You may begin. Thank you for standing by. thank you for standing by Welcome to the Richardson Electronics earnings call for the first quarter of fiscal year 2026. welcome to the richardson electronics earnings call for the first quarter of fiscal year 2026 At this time, all participants are in a listen-only mode. at this time all participants are in a listen-only mode After the speaker's presentation, there will be a question- and- answer session. after the speaker's presentation there will be a question- and- answer session To ask a question during the session, you will need to press star one one on your telephone. to ask a question during the session you will need to press star one one on your telephone You will then hear an automated message advising that your hand is raised. you will then hear an automated message advising that your hand is raised To withdraw your question, please press star one one again. to withdraw your question please press star one one again Please be advised that today's conference is being recorded. please be advised that today's conference is being recorded I would now like to turn the call over to your speaker today, Ed Richardson, CEO. i would now like to turn the call over to your speaker today ed richardson ceo You may begin. you may begin

Speaker 7: Good morning, and thank you all for joining Richardson Electronics conference call for the first quarter of fiscal year 2026. We appreciate your continued support and interest in Richardson Electronics. Joining me today are Bob Ben, Chief Financial Officer; Wendy Diddell, Chief Operating Officer; Greg Peloquin, General Manager of our Power and Microwave Technologies Group, which includes Green Energy Solutions; and Jens Ruppert, General Manager of Canvys. As a reminder, this call is being recorded and will be available for playback. I would also like to remind you that we'll be making forward-looking statements. They're based on current expectations and involve risks and uncertainties. Therefore, our actual results could be materially different. Please refer to our press release and SEC filings for an explanation of our risk factors. In Q1 of FY 2026, total sales were $54.6 million, up from $53.7 million in Q1 of last year. Good morning, and thank you all for joining Richardson Electronics conference call for the first quarter of fiscal year 2026. good morning and thank you all for joining richardson electronics conference call for the first quarter of fiscal year 2026 We appreciate your continued support and interest in Richardson Electronics. we appreciate your continued support and interest in richardson electronics Joining me today are Bob Ben, Chief Financial Officer; Wendy Diddell, Chief Operating Officer; Greg Peloquin, General Manager of our Power and Microwave Technologies Group, which includes Green Energy Solutions; and Jens Ruppert, General Manager of Canvys. joining me today are bob ben chief financial officer wendy diddell chief operating officer greg peloquin general manager of our power and microwave technologies group which includes green energy solutions and jens ruppert general manager of canvys As a reminder, this call is being recorded and will be available for playback. as a reminder this call is being recorded and will be available for playback I would also like to remind you that we'll be making forward-looking statements. i would also like to remind you that we'll be making forward-looking statements They're based on current expectations and involve risks and uncertainties. they're based on current expectations and involve risks and uncertainties Therefore, our actual results could be materially different. therefore our actual results could be materially different Please refer to our press release and SEC filings for an explanation of our risk factors. please refer to our press release and sec filings for an explanation of our risk factors In Q1 of FY 2026, total sales were $54.6 million, up from $53.7 million in Q1 of last year. in q1 of fy 2026 total sales were $54.6 million up from $53.7 million in q1 of last year Driven by sales growth in both PMT and Canvys, PMT delivered notable year-over-year sales growth driven by continued strength in our semiconductor and RF power segments. It's important to note that sales growth was partially offset by the inclusion of our healthcare business in both the current and prior quarters. As a reminder, we sold our healthcare business in Q3 of FY 2025, so this will impact our year-over-year comparisons through the end of Q3 this year. The healthcare engineering and manufacturing team is making good progress, finishing production of ALTA tubes and finalizing repair processes for the Siemens tubes, which should result in positive operating contribution toward the end of FY 2026. In our GES business unit, we were very pleased with the year-over-year growth in the wind segment. Driven by sales growth in both PMT and Canvys, PMT delivered notable year-over-year sales growth driven by continued strength in our semiconductor and RF power segments. driven by sales growth in both pmt and canvys pmt delivered notable year-over-year sales growth driven by continued strength in our semiconductor and rf power segments It's important to note that sales growth was partially offset by the inclusion of our healthcare business in both the current and prior quarters. it's important to note that sales growth was partially offset by the inclusion of our healthcare business in both the current and prior quarters As a reminder, we sold our healthcare business in Q3 of FY 2025, so this will impact our year-over-year comparisons through the end of Q3 this year. as a reminder we sold our healthcare business in q3 of fy 2025 so this will impact our year-over-year comparisons through the end of q3 this year The healthcare engineering and manufacturing team is making good progress, finishing production of ALTA tubes and finalizing repair processes for the Siemens tubes, which should result in positive operating contribution toward the end of FY 2026. the healthcare engineering and manufacturing team is making good progress finishing production of alta tubes and finalizing repair processes for the siemens tubes which should result in positive operating contribution toward the end of fy 2026 In our GES business unit, we were very pleased with the year-over-year growth in the wind segment. in our ges business unit, we were very pleased with the year-over-year growth in the wind segment The performance provides us with growth evidence that the policies from the current administration are not hurting demand of our alternative energy solutions. We believe our wind business is protected because we're pursuing programs strictly on a land-based turbine, support global customers, and provide solutions that improve the performance and efficiency of the existing fleet. While overall sales were down slightly in GES, this was driven by a large one-time order in our EV rail sector in the first quarter of the last year that did not repeat this year. Backing out this sale, GES would have been up quarter-over-quarter. A strategic priority of the company is engineered solutions, which are products we make ourselves in LaFox. The strategy focus, along with improved manufacturing utilization in the quarter, contributed to the higher gross margin versus prior year. The performance provides us with growth evidence that the policies from the current administration are not hurting demand of our alternative energy solutions. the performance provides us with growth evidence that the policies from the current administration are not hurting demand of our alternative energy solutions We believe our wind business is protected because we're pursuing programs strictly on a land-based turbine, support global customers, and provide solutions that improve the performance and efficiency of the existing fleet. we believe our wind business is protected because we're pursuing programs strictly on a land-based turbine support global customers and provide solutions that improve the performance and efficiency of the existing fleet While overall sales were down slightly in GES, this was driven by a large one-time order in our EV rail sector in the first quarter of the last year that did not repeat this year. while overall sales were down slightly in ges this was driven by a large one-time order in our ev rail sector in the first quarter of the last year that did not repeat this year Backing out this sale, GES would have been up quarter- over- quarter. backing out this sale ges would have been up quarter- over- quarter A strategic priority of the company is engineered solutions, which are products we make ourselves in LaFox. a strategic priority of the company is engineered solutions which are products we make ourselves in lafox The strategy focus, along with improved manufacturing utilization in the quarter, contributed to the higher gross margin versus prior year. the strategy focus along with improved manufacturing utilization in the quarter contributed to the higher gross margin versus prior year The long-term investment in our global footprint is also a strength, helping us better manage the tariff landscape. Finally, we're pleased to report that we generated positive operating cash flow in the quarter, marking six consecutive quarters. Our cash position remains strong at $35.7 million, providing us with flexibility to support both our ongoing operations and strategic growth opportunities. I'll now turn the call over to Bob Ben, our Chief Financial Officer, who will provide a detailed review of our first quarter results and capital position. Following Bob's remarks, Greg and Jens will provide updates on our business units, and then Wendy will follow up with a recap on our future growth strategies. The long-term investment in our global footprint is also a strength, helping us better manage the tariff landscape. the long-term investment in our global footprint is also a strength helping us better manage the tariff landscape Finally, we're pleased to report that we generated positive operating cash flow in the quarter, marking six consecutive quarters. finally we're pleased to report that we generated positive operating cash flow in the quarter marking six consecutive quarters Our cash position remains strong at $35.7 million, providing us with flexibility to support both our ongoing operations and strategic growth opportunities. our cash position remains strong at $35.7 million providing us with flexibility to support both our ongoing operations and strategic growth opportunities I'll now turn the call over to Bob Ben, our Chief Financial Officer, who will provide a detailed review of our first quarter results and capital position. i'll now turn the call over to bob ben our chief financial officer who will provide a detailed review of our first quarter results and capital position Following Bob's remarks, Greg and Jens will provide updates on our business units, and then Wendy will follow up with a recap on our future growth strategies. following bob's remarks greg and jens will provide updates on our business units and then wendy will follow up with a recap on our future growth strategies

Speaker 4: Thank you, Ed, and good morning. I will review our financial results for our first quarter of fiscal year 2026, followed by a review of our cash position. Consolidated net sales for the first quarter of fiscal 2026 increased 1.6% to $54.6 million compared to net sales of $53.7 million in the prior year's first quarter. When excluding healthcare, for which the majority of assets were sold in January 2025, net sales increased by 6.8%. Please note that healthcare results, including prior periods, are consolidated into the PMT segment beginning this quarter. This was our fifth consecutive quarterly year-over-year increase in sales. First quarter net sales growth was led by a 2.8% increase in PMT sales. Excluding healthcare, PMT sales were up 10.5% and were due to higher demand from the Company's semiconductor wafer fab customers, as well as our legacy power grid tube product lines. Thank you, Ed, and good morning. thank you ed and good morning I will review our financial results for our first quarter of fiscal year 2026, followed by a review of our cash position. i will review our financial results for our first quarter of fiscal year 2026 followed by a review of our cash position Consolidated net sales for the first quarter of fiscal 2026 increased 1.6% to $54.6 million compared to net sales of $53.7 million in the prior year's first quarter. consolidated net sales for the first quarter of fiscal 2026 increased 1.6% to $54.6 million compared to net sales of $53.7 million in the prior year's first quarter When excluding healthcare, for which the majority of assets were sold in January 2025, net sales increased by 6.8%. when excluding healthcare for which the majority of assets were sold in january 2025 net sales increased by 6.8% Please note that healthcare results, including prior periods, are consolidated into the PMT segment beginning this quarter. please note that healthcare results including prior periods are consolidated into the pmt segment beginning this quarter This was our fifth consecutive quarterly year-over-year increase in sales. this was our fifth consecutive quarterly year-over-year increase in sales First quarter net sales growth was led by a 2.8% increase in PMT sales. first quarter net sales growth was led by a 2.8% increase in pmt sales Excluding healthcare, PMT sales were up 10.5% and were due to higher demand from the Company's semiconductor wafer fab customers, as well as our legacy power grid tube product lines. excluding healthcare pmt sales were up 10.5% and were due to higher demand from the company's semiconductor wafer fab customers as well as our legacy power grid tube product lines Canvys sales increased 8.3%, which reflected improved market conditions in Europe. Partially offsetting these increases was a 10.2% decrease in sales for our GES business unit. While revenues in the wind segment increased, they were offset by the non-recurrence of a large EV locomotive order from the prior year's first quarter. Consolidated gross margin for the first quarter was 31.0% of net sales compared to 30.6% during the first quarter of fiscal 2025. The 40 basis point increase in consolidated gross margin was primarily due to margin improvement in both PMT and GES. PMT's gross margin increased to 31.3% from 30.1% as a result of a favorable product mix and improved manufacturing absorption. GES gross margin increased to 29.6% from 29.4% due to product mix, including a higher percentage of products we manufacture in LaFox. Lower gross margin for Canvys partially offset the improvement in consolidated gross margin. Canvys sales increased 8.3%, which reflected improved market conditions in Europe. canvys sales increased 8.3% which reflected improved market conditions in europe Partially offsetting these increases was a 10.2% decrease in sales for our GES business unit. partially offsetting these increases was a 10.2% decrease in sales for our ges business unit While revenues in the wind segment increased, they were offset by the non-recurrence of a large EV locomotive order from the prior year's first quarter. while revenues in the wind segment increased they were offset by the non-recurrence of a large ev locomotive order from the prior year's first quarter Consolidated gross margin for the first quarter was 31.0% of net sales compared to 30.6% during the first quarter of fiscal 2025. consolidated gross margin for the first quarter was 31.0% of net sales compared to 30.6% during the first quarter of fiscal 2025 The 40 basis point increase in consolidated gross margin was primarily due to margin improvement in both PMT and GES. the 40 basis point increase in consolidated gross margin was primarily due to margin improvement in both pmt and ges PMT's gross margin increased to 31.3% from 30.1% as a result of a favorable product mix and improved manufacturing absorption. pmt's gross margin increased to 31.3% from 30.1% as a result of a favorable product mix and improved manufacturing absorption GES gross margin increased to 29.6% from 29.4% due to product mix, including a higher percentage of products we manufacture in LaFox. ges gross margin increased to 29.6% from 29.4% due to product mix including a higher percentage of products we manufacture in lafox Lower gross margin for Canvys partially offset the improvement in consolidated gross margin. lower gross margin for canvys partially offset the improvement in consolidated gross margin Operating expenses as a percentage of net sales improved to 29.2% for the first quarter of fiscal 2026 compared to 30.0% in the first quarter of fiscal 2025. As a result, operating income was $1.0 million for the first quarter of fiscal 2026 compared to an operating income of $0.3 million in the prior year's first quarter. Other income totaled $1.4 million for the quarter, which was $1.1 million higher than the first quarter of fiscal 2025. The increase from the prior year's first quarter was mainly due to a non-recurring gain of $0.9 million from a confidential contractual settlement. Net income was $1.9 million for the first quarter of fiscal 2026 compared to $0.6 million in the first quarter of fiscal 2025. Earnings per common share diluted were $0.13 in the first quarter of fiscal 2026 compared to $0.04 in the first quarter of fiscal 2025. Operating expenses as a percentage of net sales improved to 29.2% for the first quarter of fiscal 2026 compared to 30.0% in the first quarter of fiscal 2025. operating expenses as a percentage of net sales improved to 29.2% for the first quarter of fiscal 2026 compared to 30.0% in the first quarter of fiscal 2025 As a result, operating income was $1.0 million for the first quarter of fiscal 2026 compared to an operating income of $0.3 million in the prior year's first quarter. as a result operating income was $1.0 million for the first quarter of fiscal 2026 compared to an operating income of $0.3 million in the prior year's first quarter Other income totaled $1.4 million for the quarter, which was $1.1 million higher than the first quarter of fiscal 2025. other income totaled $1.4 million for the quarter which was $1.1 million higher than the first quarter of fiscal 2025 The increase from the prior year's first quarter was mainly due to a non-recurring gain of $0.9 million from a confidential contractual settlement. the increase from the prior year's first quarter was mainly due to a non-recurring gain of $0.9 million from a confidential contractual settlement Net income was $1.9 million for the first quarter of fiscal 2026 compared to $0.6 million in the first quarter of fiscal 2025. net income was $1.9 million for the first quarter of fiscal 2026 compared to $0.6 million in the first quarter of fiscal 2025 Earnings per common share diluted were $0.13 in the first quarter of fiscal 2026 compared to $0.04 in the first quarter of fiscal 2025. earnings per common share diluted were $0.13 in the first quarter of fiscal 2026 compared to $0.04 in the first quarter of fiscal 2025 EBITDA for the first quarter of fiscal 2026 was $3.3 million versus $1.7 million in the prior year's first quarter. Please note that EBITDA is a non-GAAP financial measure, and a reconciliation of the non-GAAP item to the comparable GAAP measure is available in our first quarter fiscal year 2026 press release that was issued yesterday after the market closed. Turning to a review of our cash position, cash and cash equivalents at the end of the first quarter of fiscal 2026 were $35.7 million compared to $35.9 million at the end of fiscal 2025. Cash flow provided from operations was $1.4 million compared to cash flow provided from operations of $0.4 million in the first quarter of the prior year. EBITDA for the first quarter of fiscal 2026 was $3.3 million versus $1.7 million in the prior year's first quarter. ebitda for the first quarter of fiscal 2026 was $3.3 million versus $1.7 million in the prior year's first quarter Please note that EBITDA is a non-GAAP financial measure, and a reconciliation of the non-GAAP item to the comparable GAAP measure is available in our first quarter fiscal year 2026 press release that was issued yesterday after the market closed. please note that ebitda is a non-gaap financial measure and a reconciliation of the non-gaap item to the comparable gaap measure is available in our first quarter fiscal year 2026 press release that was issued yesterday after the market closed Turning to a review of our cash position, cash and cash equivalents at the end of the first quarter of fiscal 2026 were $35.7 million compared to $35.9 million at the end of fiscal 2025. turning to a review of our cash position cash and cash equivalents at the end of the first quarter of fiscal 2026 were $35.7 million compared to $35.9 million at the end of fiscal 2025 Cash flow provided from operations was $1.4 million compared to cash flow provided from operations of $0.4 million in the first quarter of the prior year. cash flow provided from operations was $1.4 million compared to cash flow provided from operations of $0.4 million in the first quarter of the prior year Capital expenditures of $1.0 million in the first quarter of fiscal 2026 were primarily related to our manufacturing business, facilities, improvements, and IT systems versus $0.9 million in the first quarter of fiscal year 2025. We paid $0.9 million in the first quarter for cash dividends. 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 second quarter of fiscal 2026. As of the end of the first quarter of fiscal 2026, the company had no outstanding debt on its revolving line of credit with PNC Bank. In addition, we have extended this credit agreement through October 6, 2028, with similar terms and a $20 million borrowing limit. Now I'll turn the call over to Greg, who will provide more details for our PMT and GES business groups. Capital expenditures of $1.0 million in the first quarter of fiscal 2026 were primarily related to our manufacturing business, facilities, improvements, and IT systems versus $0.9 million in the first quarter of fiscal year 2025. capital expenditures of $1.0 million in the first quarter of fiscal 2026 were primarily related to our manufacturing business facilities improvements and it systems versus $0.9 million in the first quarter of fiscal year 2025 We paid $0.9 million in the first quarter for cash dividends. we paid $0.9 million in the first quarter for cash dividends 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 second quarter of fiscal 2026. 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 second quarter of fiscal 2026 As of the end of the first quarter of fiscal 2026, the company had no outstanding debt on its revolving line of credit with PNC Bank. as of the end of the first quarter of fiscal 2026 the company had no outstanding debt on its revolving line of credit with pnc bank In addition, we have extended this credit agreement through October 6, 2028, with similar terms and a $20 million borrowing limit. in addition we have extended this credit agreement through october 6 2028 with similar terms and a $20 million borrowing limit Now I'll turn the call over to Greg, who will provide more details for our PMT and GES business groups. now i'll turn the call over to greg who will provide more details for our pmt and ges business groups

Speaker 3: Thank you, Bob, and good morning, everyone. PMT and GES are key components of our multi-year growth plan. Coming out of FY 2025, we had a strong backlog, launched several new products, expanded our customer base, and advanced multiple development programs from beta testing to pre-production. Building on that positive momentum, in Q1 fiscal year 2026, PMT, excluding healthcare, grew to $37.8 million, a 10.5% increase over prior year, and a 5.1% increase over Q4 fiscal year 2025. GES sales were $7.3 million, up 35.5% over fiscal Q4 2025, and down 10.2% year-over-year due to a multimillion-dollar EV locomotive billing that did not repeat this year and without which GES would have been up in the quarter versus prior year's first quarter. Thank you, Bob, and good morning, everyone. thank you bob and good morning everyone PMT and GES are key components of our multi-year growth plan. pmt and ges are key components of our multi-year growth plan Coming out of FY 2025, we had a strong backlog, launched several new products, expanded our customer base, and advanced multiple development programs from beta testing to pre-production. coming out of fy 2025 we had a strong backlog launched several new products expanded our customer base and advanced multiple development programs from beta testing to pre-production Building on that positive momentum, in Q1 fiscal year 2026, PMT, excluding healthcare, grew to $37.8 million, a 10.5% increase over prior year, and a 5.1% increase over Q4 fiscal year 2025. building on that positive momentum in q1 fiscal year 2026 pmt excluding healthcare grew to $37.8 million a 10.5% increase over prior year and a 5.1% increase over q4 fiscal year 2025 GES sales were $7.3 million, up 35.5% over fiscal Q4 2025, and down 10.2% year- over- year due to a multimillion-dollar EV locomotive billing that did not repeat this year and without which GES would have been up in the quarter versus prior year's first quarter. ges sales were $7.3 million up 35.5% over fiscal q4 2025 and down 10.2% year- over- year due to a multimillion-dollar ev locomotive billing that did not repeat this year and without which ges would have been up in the quarter versus prior year's first quarter However, on a positive side, the core wind turbine business grew 86.1% over prior year and 16% over prior quarter, supported by new customers, global expansion, and new products. Our pitch energy modules and related wind energy products lead GES quarter-over-quarter growth. We continue to gain market share with our end customers by developing new products and solutions that they are incorporating. Today, we serve dozens of wind turbine owner-operators, including exclusive partnerships with the top four owner-operators of GE wind turbines, RWE, Inver Energy, Enel, and NextEra. We also saw growth in our new multi-brand PEM turbine platforms. We continue to grow this program internationally, expanding into Europe and Asia with new products for other turbine platforms such as Suzlon, Senzion, Nordics, and SSB. We have now received orders from customers in Australia, India, France, and Italy. Our GES growth strategy centers around power management applications. However, on a positive side, the core wind turbine business grew 86.1% over prior year and 16% over prior quarter, supported by new customers, global expansion, and new products. however on a positive side the core wind turbine business grew 86.1% over prior year and 16% over prior quarter supported by new customers global expansion and new products Our pitch energy modules and related wind energy products lead GES quarter- over- quarter growth. our pitch energy modules and related wind energy products lead ges quarter- over- quarter growth We continue to gain market share with our end customers by developing new products and solutions that they are incorporating. we continue to gain market share with our end customers by developing new products and solutions that they are incorporating Today, we serve dozens of wind turbine owner-operators, including exclusive partnerships with the top four owner-operators of GE wind turbines, RWE, Inver Energy, Enel, and NextEra. today we serve dozens of wind turbine owner-operators including exclusive partnerships with the top four owner-operators of ge wind turbines rwe inver energy enel and nextera We also saw growth in our new multi-brand PEM turbine platforms. we also saw growth in our new multi-brand pem turbine platforms We continue to grow this program internationally, expanding into Europe and Asia with new products for other turbine platforms such as Suzlon, Senzion, Nordics, and SSB. we continue to grow this program internationally expanding into europe and asia with new products for other turbine platforms such as suzlon senzion nordics and ssb We have now received orders from customers in Australia, India, France, and Italy. we have now received orders from customers in australia india france and italy Our GES growth strategy centers around power management applications. our ges growth strategy centers around power management applications We rapidly designed multiple products, secured patents, and built a strong global customer base and partnerships. Our success is evident in our growing pipeline as we capitalize on numerous growth opportunities to support new power management requirements, significant energy transformation, and wind turbine repowering projects. We're entering Q2 FY 2026 with solid momentum. We've recently added key technology partners such as KEBA, Goshen, and Wolong, who will play critical roles in both wind power management and energy storage. Key initiatives include faster design through production cycles, supported by a new design center in Sweetwater, Texas. Sweetwater has one of the largest concentrations of power management and wind turbine engineers in North America. Expanding our design team to accelerate enhanced design cycles prior to transitioning the work to our world-class manufacturing and test group in LaFox is one of our main strategic priorities this year. We rapidly designed multiple products, secured patents, and built a strong global customer base and partnerships. we rapidly designed multiple products secured patents and built a strong global customer base and partnerships Our success is evident in our growing pipeline as we capitalize on numerous growth opportunities to support new power management requirements, significant energy transformation, and wind turbine repowering projects. our success is evident in our growing pipeline as we capitalize on numerous growth opportunities to support new power management requirements significant energy transformation and wind turbine repowering projects We're entering Q2 FY 2026 with solid momentum. we're entering q2 fy 2026 with solid momentum We've recently added key technology partners such as KEBA, Goshen, and Wolong, who will play critical roles in both wind power management and energy storage. we've recently added key technology partners such as keba goshen and wolong who will play critical roles in both wind power management and energy storage Key initiatives include faster design through production cycles, supported by a new design center in Sweetwater, Texas. key initiatives include faster design through production cycles supported by a new design center in sweetwater texas Sweetwater has one of the largest concentrations of power management and wind turbine engineers in North America. sweetwater has one of the largest concentrations of power management and wind turbine engineers in north america Expanding our design team to accelerate enhanced design cycles prior to transitioning the work to our world-class manufacturing and test group in LaFox is one of our main strategic priorities this year. expanding our design team to accelerate enhanced design cycles prior to transitioning the work to our world-class manufacturing and test group in lafox is one of our main strategic priorities this year We expect to have the Sweetwater, Texas design center operational in Q2 FY 2026. Turning to Power and Microwave Technologies Group, or PMT, which includes Electron Device Group, our legacy power grid tube products and semiconductor wafer fab equipment business, and RF and Power and Microwave Components Group, or PMG. In the quarter, sales growth was led by increased demand in both our RF and microwave components business. As we see growth in RF and wireless applications such as SATCOM and military applications, including radar and drone technology, we also saw continued growth in the fourth straight quarter among our semiconductor wafer fab manufacturing customers. Looking ahead, we're excited about the strategic initiatives across PMT and GES, including our Energy Storage System, or ESS, program, global expansion of our green energy products, and new technology partnerships. We expect to have the Sweetwater, Texas design center operational in Q2 FY 2026. we expect to have the sweetwater texas design center operational in q2 fy 2026 Turning to Power and Microwave Technologies Group, or PMT, which includes Electron Device Group, our legacy power grid tube products and semiconductor wafer fab equipment business, and RF and Power and Microwave Components Group, or PMG. turning to power and microwave technologies group or pmt which includes electron device group our legacy power grid tube products and semiconductor wafer fab equipment business and rf and power and microwave components group or pmg In the quarter, sales growth was led by increased demand in both our RF and microwave components business. in the quarter sales growth was led by increased demand in both our rf and microwave components business As we see growth in RF and wireless applications such as SATCOM and military applications, including radar and drone technology, we also saw continued growth in the fourth straight quarter among our semiconductor wafer fab manufacturing customers. as we see growth in rf and wireless applications such as satcom and military applications including radar and drone technology we also saw continued growth in the fourth straight quarter among our semiconductor wafer fab manufacturing customers Looking ahead, we're excited about the strategic initiatives across PMT and GES , including our Energy Storage System, or ESS, program, global expansion of our green energy products, and new technology partnerships. looking ahead we're excited about the strategic initiatives across pmt and ges including our energy storage system or ess program global expansion of our green energy products and new technology partnerships While we are navigating a higher degree of uncertainty associated with the impacts of tariffs and market conditions, we are pursuing opportunities that may come from these disruptions. We're investing in infrastructure, expanding our design and field engineering teams, enhancing our in-house design and manufacturing capabilities to support growth demand and innovation. Our field engineering team continues to identify new customers and opportunities. Our global capabilities and global go-to-market strategy set us apart from our competition in the power management, RF microwave, and green energy markets. We've developed a business model that combines legacy products with new technology partners and solutions, aligning with our growth strategy to deliver engineered solutions to a global customer base. This model differentiates us from our competition. Our GES products and technology partners support our niche product strategies. As it appears, federal subsidies will be harder to get under this administration. While we are navigating a higher degree of uncertainty associated with the impacts of tariffs and market conditions, we are pursuing opportunities that may come from these disruptions. while we are navigating a higher degree of uncertainty associated with the impacts of tariffs and market conditions we are pursuing opportunities that may come from these disruptions We're investing in infrastructure, expanding our design and field engineering teams, enhancing our in-house design and manufacturing capabilities to support growth demand and innovation. we're investing in infrastructure expanding our design and field engineering teams enhancing our in-house design and manufacturing capabilities to support growth demand and innovation Our field engineering team continues to identify new customers and opportunities. our field engineering team continues to identify new customers and opportunities Our global capabilities and global go-to-market strategy set us apart from our competition in the power management, RF microwave, and green energy markets. our global capabilities and global go-to-market strategy set us apart from our competition in the power management rf microwave and green energy markets We've developed a business model that combines legacy products with new technology partners and solutions, aligning with our growth strategy to deliver engineered solutions to a global customer base. we've developed a business model that combines legacy products with new technology partners and solutions aligning with our growth strategy to deliver engineered solutions to a global customer base This model differentiates us from our competition. Our GES products and technology partners support our niche product strategies. this model differentiates us from our competition. our ges products and technology partners support our niche product strategies As it appears, federal subsidies will be harder to get under this administration. as it appears federal subsidies will be harder to get under this administration Looking at our new ESS project and strategy, we are focused in key states that will continue offering large subsidies, such as Illinois, Massachusetts, and California. We are expediting our efforts to expand our global market penetration of our power management products for green energy applications, focusing particularly on Europe and Asia, as currently about 70% of our GES sales are in North America. We are working on these initiatives alongside marketing our services to companies who need partners in the U.S. to manufacture, test, and support products currently made in other countries. We acknowledge that there are a lot of moving parts and unknowns in this market right now, but we have successfully used our global resources and capabilities to mitigate the effect of situations like this in the past. Looking at our new ESS project and strategy, we are focused in key states that will continue offering large subsidies, such as Illinois, Massachusetts, and California. looking at our new ess project and strategy we are focused in key states that will continue offering large subsidies such as illinois massachusetts and california We are expediting our efforts to expand our global market penetration of our power management products for green energy applications, focusing particularly on Europe and Asia, as currently about 70% of our GES sales are in North America. we are expediting our efforts to expand our global market penetration of our power management products for green energy applications focusing particularly on europe and asia as currently about 70% of our ges sales are in north america We are working on these initiatives alongside marketing our services to companies who need partners in the U.S. to manufacture, test, and support products currently made in other countries. we are working on these initiatives alongside marketing our services to companies who need partners in the u.s to manufacture test and support products currently made in other countries We acknowledge that there are a lot of moving parts and unknowns in this market right now, but we have successfully used our global resources and capabilities to mitigate the effect of situations like this in the past. we acknowledge that there are a lot of moving parts and unknowns in this market right now but we have successfully used our global resources and capabilities to mitigate the effect of situations like this in the past In summary, we remain optimistic about our growing project-based business, even though it remains hard to forecast. We continue to increase our technology partners, design opportunities, and engineering staff. We have new technology partners that fill technology gaps. We have a proven strategy of identifying opportunities in this multi-billion-dollar market we serve. As a result, we feel FY 2026 will be another growth year for both PMT and GES. With that, I'll turn it over to Jens to discuss Canvys. In summary, we remain optimistic about our growing project-based business, even though it remains hard to forecast. in summary we remain optimistic about our growing project-based business even though it remains hard to forecast We continue to increase our technology partners, design opportunities, and engineering staff. we continue to increase our technology partners design opportunities and engineering staff We have new technology partners that fill technology gaps. we have new technology partners that fill technology gaps We have a proven strategy of identifying opportunities in this multi-billion-dollar market we serve. we have a proven strategy of identifying opportunities in this multi-billion-dollar market we serve As a result, we feel FY 2026 will be another growth year for both PMT and GES. as a result we feel fy 2026 will be another growth year for both pmt and ges With that, I'll turn it over to Jens to discuss Canvys. with that i'll turn it over to jens to discuss canvys

Speaker 9: Thanks, Greg, and good morning, everyone. Canvys engineers manufacture and sell custom displays to original equipment manufacturers across global industrial and medical markets. It is our mission to deliver high-quality display solutions tailored to our customers' needs. Canvys reported revenue of $8.3 million in the first quarter of fiscal year 2026, an increase from $7.6 million in the same quarter of the previous year. Our gross margin as a percentage of net sales decreased to 30.9% from 34.3% in the first quarter of fiscal year 2025, primarily due to product mix and higher inbound freight costs. The backlog at the end of the first quarter of fiscal 2026 remains strong at $38.4 million, providing a robust foundation for future business. During this most recent quarter, Canvys secured orders from both repeat and new medical OEM customers for a range of applications. Thanks, Greg, and good morning, everyone. thanks greg and good morning everyone Canvys engineers manufacture and sell custom displays to original equipment manufacturers across global industrial and medical markets. canvys engineers manufacture and sell custom displays to original equipment manufacturers across global industrial and medical markets It is our mission to deliver high-quality display solutions tailored to our customers' needs. it is our mission to deliver high-quality display solutions tailored to our customers' needs Canvys reported revenue of $8.3 million in the first quarter of fiscal year 2026, an increase from $7.6 million in the same quarter of the previous year. canvys reported revenue of $8.3 million in the first quarter of fiscal year 2026 an increase from $7.6 million in the same quarter of the previous year Our gross margin as a percentage of net sales decreased to 30.9% from 34.3% in the first quarter of fiscal year 2025, primarily due to product mix and higher inbound freight costs. our gross margin as a percentage of net sales decreased to 30.9% from 34.3% in the first quarter of fiscal year 2025 primarily due to product mix and higher inbound freight costs The backlog at the end of the first quarter of fiscal 2026 remains strong at $38.4 million, providing a robust foundation for future business. the backlog at the end of the first quarter of fiscal 2026 remains strong at $38.4 million providing a robust foundation for future business During this most recent quarter, Canvys secured orders from both repeat and new medical OEM customers for a range of applications. during this most recent quarter canvys secured orders from both repeat and new medical oem customers for a range of applications Our primary focus remains on robotic-assisted surgery, navigation, endoscopy, and human-machine interface solutions for the control of medical devices. Furthermore, our solutions are widely utilized in various commercial and industrial applications. For instance, our products enhance passenger information systems in trains and buses and improve HMI technologies used in printing, vending, milling, and packaging equipment. Our initiatives focus on increasing Canvys's visibility and market leadership by seeking new opportunities, building customer relationships, and collaborating within the industry to drive growth. Looking ahead, while the business is still project-focused and can therefore vary quarter-over-quarter, we are cautiously optimistic about improving demand in our markets. Positive indicators such as increasing requests for quotes and encouraging customer feedback suggest steady growth. Our dedicated sales team continues to explore new opportunities, while I focus on implementing strategic plans to ensure sustainable growth and deliver long-term value for our shareholders. Our primary focus remains on robotic-assisted surgery, navigation, endoscopy, and human-machine interface solutions for the control of medical devices. our primary focus remains on robotic-assisted surgery navigation endoscopy and human-machine interface solutions for the control of medical devices Furthermore, our solutions are widely utilized in various commercial and industrial applications. furthermore our solutions are widely utilized in various commercial and industrial applications For instance, our products enhance passenger information systems in trains and buses and improve HMI technologies used in printing, vending, milling, and packaging equipment. for instance our products enhance passenger information systems in trains and buses and improve hmi technologies used in printing vending milling and packaging equipment Our initiatives focus on increasing Canvys's visibility and market leadership by seeking new opportunities, building customer relationships, and collaborating within the industry to drive growth. our initiatives focus on increasing canvys's visibility and market leadership by seeking new opportunities building customer relationships and collaborating within the industry to drive growth Looking ahead, while the business is still project-focused and can therefore vary quarter- over- quarter, we are cautiously optimistic about improving demand in our markets. looking ahead while the business is still project-focused and can therefore vary quarter- over- quarter we are cautiously optimistic about improving demand in our markets Positive indicators such as increasing requests for quotes and encouraging customer feedback suggest steady growth. positive indicators such as increasing requests for quotes and encouraging customer feedback suggest steady growth Our dedicated sales team continues to explore new opportunities, while I focus on implementing strategic plans to ensure sustainable growth and deliver long-term value for our shareholders. our dedicated sales team continues to explore new opportunities while i focus on implementing strategic plans to ensure sustainable growth and deliver long-term value for our shareholders I will now turn the call over to Wendy. I will now turn the call over to Wendy. i will now turn the call over to wendy

Speaker 6: Thank you, Jens, and good morning, everyone. While our healthcare business is now included in PMT, I want to provide some additional color as we go through this transition period over the next several quarters. As a reminder, we sell CT tubes exclusively to DirectMed as provided under the terms of the January 2025 sale and distribution agreements. I am pleased to convey we are making excellent progress finalizing production of our ALTA tubes. We've also made good strides over the last quarter, validating new equipment and materials required to improve our processes for the repaired Siemens tube types. Comparable healthcare sales throughout most of FY 2026 will be lower than prior year, given DirectMed acquired the healthcare parts business. The sale concluded in January 2025, so this unfavorable comp will continue through Q3 FY 2026. Thank you, Jens, and good morning, everyone. thank you jens and good morning everyone While our healthcare business is now included in PMT, I want to provide some additional color as we go through this transition period over the next several quarters. while our healthcare business is now included in pmt i want to provide some additional color as we go through this transition period over the next several quarters As a reminder, we sell CT tubes exclusively to DirectMed as provided under the terms of the January 2025 sale and distribution agreements. as a reminder we sell ct tubes exclusively to directmed as provided under the terms of the january 2025 sale and distribution agreements I am pleased to convey we are making excellent progress finalizing production of our ALTA tubes. i am pleased to convey we are making excellent progress finalizing production of our alta tubes We've also made good strides over the last quarter, validating new equipment and materials required to improve our processes for the repaired Siemens tube types. we've also made good strides over the last quarter validating new equipment and materials required to improve our processes for the repaired siemens tube types Comparable healthcare sales throughout most of FY 2026 will be lower than prior year, given DirectMed acquired the healthcare parts business. comparable healthcare sales throughout most of fy 2026 will be lower than prior year given directmed acquired the healthcare parts business The sale concluded in January 2025, so this unfavorable comp will continue through Q3 FY 2026. the sale concluded in january 2025 so this unfavorable comp will continue through q3 fy 2026 We anticipate the financial impact of the retained CT tube business will turn positive in the fourth quarter of FY 2026 or shortly thereafter. Last quarter, after the sale of Richardson Healthcare, we discussed our focus on accelerating growth and improving efficiency. In the first quarter, we were pleased to see year-over-year growth in PMT and Canvys, as well as the wind energy portion of GES, reflecting our ongoing investments in these sectors. Of particular importance is the success we continue to see with our engineered solutions growth strategy. We also see some initial benefits from the Big Beautiful Bill. There are implications in the bill that are fostering wind turbine repowers, which lift sales of our wind turbine modules, as well as sales of products from our technology partners. Wind management companies need to upgrade their towers to receive comparable tax benefits in coming years. We anticipate the financial impact of the retained CT tube business will turn positive in the fourth quarter of FY 2026 or shortly thereafter. we anticipate the financial impact of the retained ct tube business will turn positive in the fourth quarter of fy 2026 or shortly thereafter Last quarter, after the sale of Richardson Healthcare, we discussed our focus on accelerating growth and improving efficiency. last quarter after the sale of richardson healthcare we discussed our focus on accelerating growth and improving efficiency In the first quarter, we were pleased to see year-over-year growth in PMT and Canvys, as well as the wind energy portion of GES, reflecting our ongoing investments in these sectors. in the first quarter we were pleased to see year-over-year growth in pmt and canvys as well as the wind energy portion of ges reflecting our ongoing investments in these sectors Of particular importance is the success we continue to see with our engineered solutions growth strategy. of particular importance is the success we continue to see with our engineered solutions growth strategy We also see some initial benefits from the Big Beautiful Bill. we also see some initial benefits from the big beautiful bill There are implications in the bill that are fostering wind turbine repowers, which lift sales of our wind turbine modules, as well as sales of products from our technology partners. there are implications in the bill that are fostering wind turbine repowers which lift sales of our wind turbine modules as well as sales of products from our technology partners Wind management companies need to upgrade their towers to receive comparable tax benefits in coming years. wind management companies need to upgrade their towers to receive comparable tax benefits in coming years In the quarter, we announced our participation in the REV Illinois program, which provides significant tax credits in return for investment in alternative energy technology development in the state of Illinois. We're making progress developing a world-class battery energy storage demonstration site at our LaFox facility. As we've mentioned before, the demand for battery energy storage continues to accelerate, and our turnkey solutions position us to capitalize on that growth. Our Made in America marketing campaign recently kicked off with the addition of a dedicated business development manager. We are highlighting our capabilities on our website and through trade show attendance. In addition, we are leveraging our existing sales organization and global customer relationships throughout the company. Finally, we are seeing increasing demand for our engineered solutions in the semiconductor wafer fab equipment market. In the quarter, we announced our participation in the REV Illinois program, which provides significant tax credits in return for investment in alternative energy technology development in the state of Illinois. in the quarter we announced our participation in the rev illinois program which provides significant tax credits in return for investment in alternative energy technology development in the state of illinois We're making progress developing a world-class battery energy storage demonstration site at our LaFox facility. we're making progress developing a world-class battery energy storage demonstration site at our lafox facility As we've mentioned before, the demand for battery energy storage continues to accelerate, and our turnkey solutions position us to capitalize on that growth. as we've mentioned before the demand for battery energy storage continues to accelerate and our turnkey solutions position us to capitalize on that growth Our Made in America marketing campaign recently kicked off with the addition of a dedicated business development manager. our made in america marketing campaign recently kicked off with the addition of a dedicated business development manager We are highlighting our capabilities on our website and through trade show attendance. we are highlighting our capabilities on our website and through trade show attendance In addition, we are leveraging our existing sales organization and global customer relationships throughout the company. in addition we are leveraging our existing sales organization and global customer relationships throughout the company Finally, we are seeing increasing demand for our engineered solutions in the semiconductor wafer fab equipment market. finally we are seeing increasing demand for our engineered solutions in the semiconductor wafer fab equipment market Our large customers in this segment indicate sustained growth relating to the ongoing benefit of AI on equipment demand throughout the world. Rest assured, the management team remains focused on efficiency and cash generation as well. The end of the significant inventory growth in support of one of our largest suppliers, who will soon terminate production of power grid tubes, is in sight. In this regard, we are working closely with other partners to ensure ongoing sources of supply, but we are in a good inventory position to execute this strategy over several years. Longer term, we remain committed to driving growth both organically and through strategic acquisitions. We're being thoughtful in our approach. We are looking for the right opportunities to utilize our capabilities and accelerate our growth while making full use of our global infrastructure. Our large customers in this segment indicate sustained growth relating to the ongoing benefit of AI on equipment demand throughout the world. our large customers in this segment indicate sustained growth relating to the ongoing benefit of ai on equipment demand throughout the world Rest assured, the management team remains focused on efficiency and cash generation as well. rest assured the management team remains focused on efficiency and cash generation as well The end of the significant inventory growth in support of one of our largest suppliers, who will soon terminate production of power grid tubes, is in sight. the end of the significant inventory growth in support of one of our largest suppliers who will soon terminate production of power grid tubes is in sight In this regard, we are working closely with other partners to ensure ongoing sources of supply, but we are in a good inventory position to execute this strategy over several years. in this regard we are working closely with other partners to ensure ongoing sources of supply but we are in a good inventory position to execute this strategy over several years Longer term, we remain committed to driving growth both organically and through strategic acquisitions. longer term we remain committed to driving growth both organically and through strategic acquisitions We're being thoughtful in our approach. we're being thoughtful in our approach We are looking for the right opportunities to utilize our capabilities and accelerate our growth while making full use of our global infrastructure. we are looking for the right opportunities to utilize our capabilities and accelerate our growth while making full use of our global infrastructure We believe our current strategic initiatives will drive revenue and profitability growth over the next several years, while we consider longer-term strategic acquisitions that further enhance our business. I will now turn the call back to Ed. We believe our current strategic initiatives will drive revenue and profitability growth over the next several years, while we consider longer-term strategic acquisitions that further enhance our business. we believe our current strategic initiatives will drive revenue and profitability growth over the next several years while we consider longer-term strategic acquisitions that further enhance our business I will now turn the call back to Ed. i will now turn the call back to ed

Speaker 7: Thanks, Wendy. In closing, our results this quarter demonstrate the strength of our strategy and the resilience of our business model. By sharpening our focus on repeatable sales, driving strong cash flow, and building on our diversity across power management and alternative energy solutions, we're positioning the company for long-term success. At the same time, we remain disciplined in our commitment to improving profitability. These priorities give us confidence in our ability to deliver sustainable value for our customers, shareholders, and employees as we move forward. We'll open the questions now. Thanks, Wendy. thanks wendy In closing, our results this quarter demonstrate the strength of our strategy and the resilience of our business model. in closing our results this quarter demonstrate the strength of our strategy and the resilience of our business model By sharpening our focus on repeatable sales, driving strong cash flow, and building on our diversity across power management and alternative energy solutions, we're positioning the company for long-term success. by sharpening our focus on repeatable sales driving strong cash flow and building on our diversity across power management and alternative energy solutions we're positioning the company for long-term success At the same time, we remain disciplined in our commitment to improving profitability. at the same time we remain disciplined in our commitment to improving profitability These priorities give us confidence in our ability to deliver sustainable value for our customers, shareholders, and employees as we move forward. these priorities give us confidence in our ability to deliver sustainable value for our customers shareholders and employees as we move forward We'll open the questions now. we'll open the questions now

Speaker 8: Certainly. Ladies and gentlemen, due to time constraints, we ask that you please limit yourself to one question and one follow-up. Again, we ask that you please limit yourself to one question and a follow-up until we have all had a chance for a question, after which we will answer additional questions from you as time permits. As a reminder, to ask a question, please press star one one on your telephone and wait for your name to be announced. Our first question will be coming from Robert Brooks of Northland Capital Markets. Your line is open, Robert. Certainly. certainly Ladies and gentlemen, due to time constraints, we ask that you please limit yourself to one question and one follow-up. ladies and gentlemen due to time constraints we ask that you please limit yourself to one question and one follow-up Again, we ask that you please limit yourself to one question and a follow-up until we have all had a chance for a question, after which we will answer additional questions from you as time permits. again we ask that you please limit yourself to one question and a follow-up until we have all had a chance for a question after which we will answer additional questions from you as time permits As a reminder, to ask a question, please press star one one on your telephone and wait for your name to be announced. as a reminder to ask a question please press star one one on your telephone and wait for your name to be announced Our first question will be coming from Robert Brooks of Northland Capital Markets. our first question will be coming from robert brooks of northland capital markets Your line is open, Robert. your line is open robert

Speaker 2: Hey, good morning, guys. I wanted to ask you on where we're at with the ULTRA3000s getting onto GE's approved aftermarket vendors list. On your fourth quarter call earlier this summer, you had said that you did a final test in June and the engineering team sent it to GE Legal and it was sitting there. All indications were that the service agreements were not going to be jeopardized if the ULTRA3000s are used. I just wanted to hear where that's sitting or any new developments on that. Hey, good morning, guys. hey good morning guys I wanted to ask you on where we're at with the ULTRA3000 s getting onto GE's approved aftermarket vendors list. i wanted to ask you on where we're at with the ultra3000 s getting onto ge's approved aftermarket vendors list On your fourth quarter call earlier this summer, you had said that you did a final test in June and the engineering team sent it to GE Legal and it was sitting there. on your fourth quarter call earlier this summer you had said that you did a final test in june and the engineering team sent it to ge legal and it was sitting there All indications were that the service agreements were not going to be jeopardized if the ULTRA3000 s are used. all indications were that the service agreements were not going to be jeopardized if the ultra3000 s are used I just wanted to hear where that's sitting or any new developments on that. i just wanted to hear where that's sitting or any new developments on that

Speaker 3: Yeah, hi Bobby. They update me every week. We actually talked to GE about other things, this included. We are in communication with them. Their engineering team has signed off on it, and the last communication, which was last week, was that it's final signatures from legal. They are still waiting on it, and it was promised to us here in the next week or two. That is the status of it. Once we get that final signature from their legal team, we will send them a number of units. They will test them, mainly for safety, not for function, but for safety because their installers will be working with it. Once that is done, they will approve it. Yeah, hi Bobby. yeah hi bobby They update me every week. they update me every week We actually talked to GE about other things, this included. we actually talked to ge about other things this included We are in communication with them. we are in communication with them Their engineering team has signed off on it, and the last communication, which was last week, was that it's final signatures from legal. They are still waiting on it, and it was promised to us here in the next week or two. their engineering team has signed off on it and the last communication which was last week was that it's final signatures from legal. they are still waiting on it and it was promised to us here in the next week or two That is the status of it. that is the status of it Once we get that final signature from their legal team, we will send them a number of units. They will test them, mainly for safety, not for function, but for safety because their installers will be working with it. once we get that final signature from their legal team we will send them a number of units. they will test them mainly for safety not for function but for safety because their installers will be working with it Once that is done, they will approve it. once that is done they will approve it Along with that, not only are we pushing, if you will, GE, but also two of our largest owner-operators are also pushing it because they have both TSAs and their own repair. The short answer, which I just went long on, is we expect it to be signed in the next couple of weeks. They will do the audit of it for quality safety, and we fully expect sign-off here in Q2 at some point. Along with that, not only are we pushing, if you will, GE, but also two of our largest owner-operators are also pushing it because they have both TSAs and their own repair. along with that not only are we pushing if you will ge but also two of our largest owner-operators are also pushing it because they have both tsas and their own repair The short answer, which I just went long on, is we expect it to be signed in the next couple of weeks. the short answer which i just went long on is we expect it to be signed in the next couple of weeks They will do the audit of it for quality safety, and we fully expect sign-off here in Q2 at some point. they will do the audit of it for quality safety and we fully expect sign-off here in q2 at some point

Speaker 2: Got it. The semi-fab sales were up 52% year-over-year, which was great to see. I just wanted to make sure I'm thinking about it right. Wasn't 1Q last year we were at like a trough level for those sales? The follow-up is, would you expect that year-over-year growth rate to continue through your fiscal 2026, or maybe at the minimum, the nominal level of semi-wafer fab sales in 1Q stay consistent through fiscal 2026? Got it. got it The semi-fab sales were up 52% year- over- year, which was great to see. the semi-fab sales were up 52% year- over- year which was great to see I just wanted to make sure I'm thinking about it right. i just wanted to make sure i'm thinking about it right Wasn't 1 Q last year we were at like a trough level for those sales? wasn't 1 q last year we were at like a trough level for those sales The follow-up is, would you expect that year-over-year growth rate to continue through your fiscal 2026, or maybe at the minimum, the nominal level of semi-wafer fab sales in 1 Q stay consistent through fiscal 2026? the follow-up is would you expect that year-over-year growth rate to continue through your fiscal 2026 or maybe at the minimum the nominal level of semi-wafer fab sales in 1 q stay consistent through fiscal 2026

Speaker 3: Yeah, you're correct, Bobby. Q1 of last year was the lowest quarter of the year for LAM, although they recovered very well. We don't get a lot of visibility from them. The most recent information that they put in the portal, it looks like these larger numbers they've been talking about now, which seems like a year or two, we should start seeing strong, strong growth in Q3 and Q4 of our fiscal year. We'll kind of be at the same run rate here in Q1 and Q2 with the large growth in Q3 and Q4 based on their forecast, which is a forecast. Yeah, you're correct, Bobby. yeah you're correct bobby Q1 of last year was the lowest quarter of the year for LAM, although they recovered very well. q1 of last year was the lowest quarter of the year for lam although they recovered very well We don't get a lot of visibility from them. we don't get a lot of visibility from them The most recent information that they put in the portal, it looks like these larger numbers they've been talking about now, which seems like a year or two, we should start seeing strong, strong growth in Q3 and Q4 of our fiscal year. the most recent information that they put in the portal it looks like these larger numbers they've been talking about now which seems like a year or two we should start seeing strong strong growth in q3 and q4 of our fiscal year We'll kind of be at the same run rate here in Q1 and Q2 with the large growth in Q3 and Q4 based on their forecast, which is a forecast. we'll kind of be at the same run rate here in q1 and q2 with the large growth in q3 and q4 based on their forecast which is a forecast

Speaker 2: Thank you. Thank you. thank you

Speaker 8: Our next question will be coming from Anja Soderstrom of Sidoti. Your line is open. Our next question will be coming from Anja Soderstrom of Sidoti. our next question will be coming from anja soderstrom of sidoti Your line is open. your line is open

Speaker 1: Hi, thank you for taking my question. I'm just curious with the wind rotors you noted from some conference around the world, how meaningful were them and how do they compare to the actual opportunity there? Hi, thank you for taking my question. hi thank you for taking my question I'm just curious with the wind rotors you noted from some conference around the world, how meaningful were them and how do they compare to the actual opportunity there? i'm just curious with the wind rotors you noted from some conference around the world how meaningful were them and how do they compare to the actual opportunity there

Speaker 3: I'm sorry, could you repeat that quote? I'm sorry, could you repeat that quote? i'm sorry could you repeat that quote

Speaker 1: Outside the U.S., what were sales like? Outside the U.S., what were sales like? outside the u.s what were sales like

Speaker 3: Yeah, so we've launched it hard to produce this product globally with our customer base. It's a smaller market than North America, but still a very strong market for us. We've been able to do a great job in introducing four new platforms, which will be more popular in Europe than GE, Nordex, Senvion, Suzlon, and SSB. We've done already in Q4 and part of Q1 alpha and beta testing with customers in Australia, India, France, and Italy. They've approved that, and we've already received orders in our Q1 from customers in those four countries. We look at this every week. If I look at the document that we track all the opportunities that we're currently working on in terms of our teams worldwide, it's getting up to two or three pages. It's active. It's just an education process to these customers that it's available. Yeah, so we've launched it hard to produce this product globally with our customer base. yeah so we've launched it hard to produce this product globally with our customer base It's a smaller market than North America, but still a very strong market for us. it's a smaller market than north america but still a very strong market for us We've been able to do a great job in introducing four new platforms, which will be more popular in Europe than GE, Nordex, Senvion, Suzlon, and SSB. we've been able to do a great job in introducing four new platforms which will be more popular in europe than ge nordex senvion suzlon and ssb We've done already in Q4 and part of Q1 alpha and beta testing with customers in Australia, India, France, and Italy. we've done already in q4 and part of q1 alpha and beta testing with customers in australia india france and italy They've approved that, and we've already received orders in our Q1 from customers in those four countries. they've approved that and we've already received orders in our q1 from customers in those four countries We look at this every week. we look at this every week If I look at the document that we track all the opportunities that we're currently working on in terms of our teams worldwide, it's getting up to two or three pages. if i look at the document that we track all the opportunities that we're currently working on in terms of our teams worldwide it's getting up to two or three pages It's active. it's active It's just an education process to these customers that it's available. it's just an education process to these customers that it's available This product is available for their specific turbines. Of course, like we did with North America, you'll have alpha testing, beta testing, and then final production. I would say it's not going as fast as we'd like. Nothing ever does. We're getting some good traction expanding this capability, if you will, outside of North America. As you know, 70% of our business is currently in North America, so it's pretty much nothing but upside outside of North America. This product is available for their specific turbines. this product is available for their specific turbines Of course, like we did with North America, you'll have alpha testing, beta testing, and then final production. of course like we did with north america you'll have alpha testing beta testing and then final production I would say it's not going as fast as we'd like. i would say it's not going as fast as we'd like Nothing ever does. nothing ever does We're getting some good traction expanding this capability, if you will, outside of North America. we're getting some good traction expanding this capability if you will outside of north america As you know, 70% of our business is currently in North America, so it's pretty much nothing but upside outside of North America. as you know 70% of our business is currently in north america so it's pretty much nothing but upside outside of north america

Speaker 1: Okay, thank you. What do you expect in terms of CapEx for the year, given your expansions in LaFox and the Texas center? Okay, thank you. okay thank you What do you expect in terms of CapEx for the year, given your expansions in LaFox and the Texas center? what do you expect in terms of capex for the year given your expansions in lafox and the texas center

Speaker 6: I'll take that one, Anya. We're estimating it'll probably be in that $5 million range, a little bit higher than last year. Last year was very low because there were some programs that were pushed into FY 2026. We'll stick with that $4 million-$5 million range. I'll take that one, Anya. i'll take that one anya We're estimating it'll probably be in that $5 million range, a little bit higher than last year. we're estimating it'll probably be in that $5 million range a little bit higher than last year Last year was very low because there were some programs that were pushed into FY 2026. last year was very low because there were some programs that were pushed into fy 2026 We'll stick with that $4 million- $5 million range. we'll stick with that $4 million- $5 million range

Speaker 1: Okay, let me ask a question. Okay, let me ask a question. okay let me ask a question

Speaker 6: Anja, real quick, on the REV Illinois program, and Greg, you can jump in here. The CapEx requirements themselves are not significant in this fiscal year. What we're looking at is some equipment that will help improve our manufacturing efficiencies and position us for new opportunities, primarily and particularly in the ESS solutions. What we'll be looking at, the REV Illinois program allows us to account for people in addition to CapEx, in addition to other R&D-related expenses. That's where we're focused on right now, making sure we've got the engineering resources we need, the program managers we need, so that when we get our facility built here in FY 2026, we'll be ready to efficiently and effectively market that. Anja, real quick, on the REV Illinois program, and Greg, you can jump in here. anja real quick on the rev illinois program and greg you can jump in here The CapEx requirements themselves are not significant in this fiscal year. the capex requirements themselves are not significant in this fiscal year What we're looking at is some equipment that will help improve our manufacturing efficiencies and position us for new opportunities, primarily and particularly in the ESS solutions. what we're looking at is some equipment that will help improve our manufacturing efficiencies and position us for new opportunities primarily and particularly in the ess solutions What we'll be looking at, the REV Illinois program allows us to account for people in addition to CapEx, in addition to other R&D-related expenses. what we'll be looking at the rev illinois program allows us to account for people in addition to capex in addition to other r&d-related expenses That's where we're focused on right now, making sure we've got the engineering resources we need, the program managers we need, so that when we get our facility built here in FY 2026, we'll be ready to efficiently and effectively market that. that's where we're focused on right now making sure we've got the engineering resources we need the program managers we need so that when we get our facility built here in fy 2026 we'll be ready to efficiently and effectively market that

Speaker 3: Yeah, I mean, this good example is the demo site. All that development goes towards the number that we've been to attain to get all the subsidies and rebates. Just one thing in the REV Illinois program, you know, we're going to apply for every single subsidy and tax credit we can get with this green energy program. Luckily, the state of Illinois has, even better than California, the most rebates and tax incentives for people doing wind, solar, energy storage, green energy itself. We found out about this from some local contacts. We applied. You have four years to do it, and it's approximately $8 million in total investment and a number of headcount. We have four years to do it. We're not doing things to get that credit. We're doing things to grow the business and increase shareholders' value. Yeah, I mean, this good example is the demo site. yeah i mean this good example is the demo site All that development goes towards the number that we've been to attain to get all the subsidies and rebates. all that development goes towards the number that we've been to attain to get all the subsidies and rebates Just one thing in the REV Illinois program, you know, we're going to apply for every single subsidy and tax credit we can get with this green energy program. just one thing in the rev illinois program you know we're going to apply for every single subsidy and tax credit we can get with this green energy program Luckily, the state of Illinois has, even better than California, the most rebates and tax incentives for people doing wind, solar, energy storage, green energy itself. luckily the state of illinois has even better than california the most rebates and tax incentives for people doing wind solar energy storage green energy itself We found out about this from some local contacts. we found out about this from some local contacts We applied. we applied You have four years to do it, and it's approximately $8 million in total investment and a number of headcount. you have four years to do it and it's approximately $8 million in total investment and a number of headcount We have four years to do it. we have four years to do it We're not doing things to get that credit. we're not doing things to get that credit We're doing things to grow the business and increase shareholders' value. we're doing things to grow the business and increase shareholders' value Our estimate is we'll hit those numbers very easily, so we might as well take advantage of it. Our estimate is we'll hit those numbers very easily, so we might as well take advantage of it. our estimate is we'll hit those numbers very easily so we might as well take advantage of it

Speaker 1: Okay, great. Thank you. That was all for me. Okay, great. okay great Thank you. thank you That was all for me. that was all for me

Speaker 6: Thanks, Anja. Thanks, Anja. thanks anja

Speaker 8: Our next question will be coming from Brendan Kenny, private investor. Your line is open. Our next question will be coming from Brendan Kenny, private investor. our next question will be coming from brendan kenny private investor Your line is open. your line is open

Speaker 10: Hello, can you hear me? Hello, can you hear me? hello can you hear me

Speaker 6: Yes. Yes. yes

Speaker 3: Yes. Yes. yes

Speaker 6: Yes, we can hear you, Brendan. Yes, we can hear you, Brendan. yes we can hear you brendan

Speaker 10: Hi. Just one quick question. For the operating income, you know, it says it was mainly due to a non-recurring gain of $0.9 million. Could you just go into a bit more detail about what that was? Hi. hi Just one quick question. just one quick question For the operating income, you know, it says it was mainly due to a non-recurring gain of $0.9 million. for the operating income you know it says it was mainly due to a non-recurring gain of $0.9 million Could you just go into a bit more detail about what that was? could you just go into a bit more detail about what that was

Speaker 4: Hi, Brendan. This is Bob Ben. First of all, the operating income, as I stated in my remarks, was $1.0 million, and that did not include the non-recurring gain that's below in other income, just to clarify. The operating income for the quarter more than tripled from last year's first quarter. To specifically address your question on the $0.9 million non-recurring gain, as I stated in my remarks, that's from a confidential contractual settlement. Unfortunately, I'm not really allowed to say much about it other than that. Hi, Brendan. hi brendan This is Bob Ben. this is bob ben First of all, the operating income, as I stated in my remarks, was $1.0 million, and that did not include the non-recurring gain that's below in other income, just to clarify. first of all the operating income as i stated in my remarks was $1.0 million and that did not include the non-recurring gain that's below in other income just to clarify The operating income for the quarter more than tripled from last year's first quarter. the operating income for the quarter more than tripled from last year's first quarter To specifically address your question on the $0.9 million non-recurring gain, as I stated in my remarks, that's from a confidential contractual settlement. to specifically address your question on the $0.9 million non-recurring gain as i stated in my remarks that's from a confidential contractual settlement Unfortunately, I'm not really allowed to say much about it other than that. unfortunately i'm not really allowed to say much about it other than that

Speaker 10: Okay, I missed that. Yeah, thank you. Okay, I missed that. okay i missed that Yeah, thank you. yeah thank you

Speaker 6: Thanks, Brendan. Thanks, Brendan. thanks brendan

Speaker 8: As a reminder, to ask a question, please press star one one on your telephone and wait for your name to be announced. Our next question will be coming from Chip Rui of Rui Asset Management. Your line's open. As a reminder, to ask a question, please press star one one on your telephone and wait for your name to be announced. as a reminder to ask a question please press star one one on your telephone and wait for your name to be announced Our next question will be coming from Chip Rui of Rui Asset Management. our next question will be coming from chip rui of rui asset management Your line's open. your line's open

Speaker 5: Morning, guys. Good quarter. I have three questions, and maybe I'll just lay them out, and you can divvy them up. First, Wendy, your comment on the repower initiatives and the Big Beautiful Bill, could you expand on that? I think the sentiment has been kind of misplaced on you guys around wind anyway because you're not OEM. You're pretty much all aftermarket. Now that there's a potential positive from the administration on repowering, I'd just like to dig into that a little bit more. Secondly, the operating leverage looked great. On the operating income, can you just give us some thoughts on how the rest of the year will play out? Can we continue to see muted expense growth that would contribute to good leverage through the year? Morning, guys. morning guys Good quarter. good quarter I have three questions, and maybe I'll just lay them out, and you can divvy them up. i have three questions and maybe i'll just lay them out and you can divvy them up First, Wendy, your comment on the repower initiatives and the Big Beautiful Bill, could you expand on that? first wendy your comment on the repower initiatives and the big beautiful bill could you expand on that I think the sentiment has been kind of misplaced on you guys around wind anyway because you're not OEM. i think the sentiment has been kind of misplaced on you guys around wind anyway because you're not oem You're pretty much all aftermarket. you're pretty much all aftermarket Now that there's a potential positive from the administration on repowering, I'd just like to dig into that a little bit more. now that there's a potential positive from the administration on repowering i'd just like to dig into that a little bit more Secondly, the operating leverage looked great. secondly the operating leverage looked great On the operating income, can you just give us some thoughts on how the rest of the year will play out? on the operating income can you just give us some thoughts on how the rest of the year will play out Can we continue to see muted expense growth that would contribute to good leverage through the year? can we continue to see muted expense growth that would contribute to good leverage through the year Last, maybe, Ed, I like the comments on kind of, I mean, clearly the semi business and PMT is a really positive thing to hear the outlook there. Maybe dig into the other side. The legacy RF business seems like it's perking up too. Maybe some details there. Thanks. Last, maybe, Ed, I like the comments on kind of, I mean, clearly the semi business and PMT is a really positive thing to hear the outlook there. last maybe ed i like the comments on kind of i mean clearly the semi business and pmt is a really positive thing to hear the outlook there Maybe dig into the other side. maybe dig into the other side The legacy RF business seems like it's perking up too. the legacy rf business seems like it's perking up too Maybe some details there. maybe some details there Thanks. thanks

Speaker 6: Thanks, Chip. Thanks, Chip. thanks chip

Speaker 3: Hey, Chip, I'll just talk about the first question you had. It's a great question. You hit it on the head. You understand it very well that almost all of our business, other than Suzlon, is aftermarket. With this administration kind of removing a lot of the subsidies you get for new turbines, kind of like your old car in college, you can't afford a new one, so you refurbish and fix up your current one. That's what's going on in the term in the industry called repowering, where they, in some cases, drop the turbine to the ground and then replace everything they can, and then they'll have a turbine that's good for another, you know, 10-15 years. Hey, Chip, I'll just talk about the first question you had. hey chip i'll just talk about the first question you had It's a great question. it's a great question You hit it on the head. you hit it on the head You understand it very well that almost all of our business, other than Suzlon, is aftermarket. you understand it very well that almost all of our business other than suzlon is aftermarket With this administration kind of removing a lot of the subsidies you get for new turbines, kind of like your old car in college, you can't afford a new one, so you refurbish and fix up your current one. with this administration kind of removing a lot of the subsidies you get for new turbines kind of like your old car in college you can't afford a new one so you refurbish and fix up your current one That's what's going on in the term in the industry called repowering, where they, in some cases, drop the turbine to the ground and then replace everything they can, and then they'll have a turbine that's good for another, you know, 10- 15 years. that's what's going on in the term in the industry called repowering where they in some cases drop the turbine to the ground and then replace everything they can and then they'll have a turbine that's good for another you know 10- 15 years At that time, instead of putting lead acid batteries back into the turbines, many of our customers and some of those larger orders we got in terms of our large, you know, we had a $1.25 million hook to bill in FY 2025, was people ordering parts for this repowering program. They will put in our pitch energy modules, which will last up to 15 years, instead of the lead acid batteries. That decision by the government, which is getting a lot of press, actually, in a roundabout way, supports us and hopefully will expedite some of the large orders we have on our books in terms of pulling them in over the next two to three quarters. At that time, instead of putting lead acid batteries back into the turbines, many of our customers and some of those larger orders we got in terms of our large, you know, we had a $1.25 million hook to bill in FY 2025, was people ordering parts for this repowering program. at that time instead of putting lead acid batteries back into the turbines many of our customers and some of those larger orders we got in terms of our large you know we had a $1.25 million hook to bill in fy 2025 was people ordering parts for this repowering program They will put in our pitch energy modules, which will last up to 15 years, instead of the lead acid batteries. they will put in our pitch energy modules which will last up to 15 years instead of the lead acid batteries That decision by the government, which is getting a lot of press, actually, in a roundabout way, supports us and hopefully will expedite some of the large orders we have on our books in terms of pulling them in over the next two to three quarters. that decision by the government which is getting a lot of press actually in a roundabout way supports us and hopefully will expedite some of the large orders we have on our books in terms of pulling them in over the next two to three quarters The last thing with that, on the Big Beautiful Bill, what Wendy was talking about, if they get it done by the end of this calendar year, they can put some of that money to the side or keep the current rebates and tax credits that they have now. We're working with a lot of our owner-operators to get their forecast between now and the end of the year. We grew 23% in FY 2025. We fully expect, based on the forecast and some of these other things, that GES will grow double digits in FY 2026. I guess operating. The last thing with that, on the Big Beautiful Bill, what Wendy was talking about, if they get it done by the end of this calendar year, they can put some of that money to the side or keep the current rebates and tax credits that they have now. the last thing with that on the big beautiful bill what wendy was talking about if they get it done by the end of this calendar year they can put some of that money to the side or keep the current rebates and tax credits that they have now We're working with a lot of our owner-operators to get their forecast between now and the end of the year. we're working with a lot of our owner-operators to get their forecast between now and the end of the year We grew 23% in FY 2025. we grew 23% in fy 2025 We fully expect, based on the forecast and some of these other things, that GES will grow double digits in FY 2026. we fully expect based on the forecast and some of these other things that ges will grow double digits in fy 2026 I guess operating. i guess operating

Speaker 6: I'll take that one. I'll take that one. i'll take that one

Speaker 3: Okay. Okay. okay

Speaker 6: Okay. In terms of leveraging and operating expenses, I'm looking at our forecast for the full year. It'll be up just a little bit, not a lot over FY 2025, as we invest in some of the programs that Greg has mentioned, in terms of additional engineers, additional people outside the U.S. focusing on green energy growth. Again, Chip, one of the things we do well as a company is really managing our SG&A level and keeping that increase under control. I would not anticipate a significant increase over FY 2025. Does that answer your question? Okay. okay In terms of leveraging and operating expenses, I'm looking at our forecast for the full year. in terms of leveraging and operating expenses i'm looking at our forecast for the full year It'll be up just a little bit, not a lot over FY 2025, as we invest in some of the programs that Greg has mentioned, in terms of additional engineers, additional people outside the U.S. focusing on green energy growth. it'll be up just a little bit not a lot over fy 2025 as we invest in some of the programs that greg has mentioned in terms of additional engineers additional people outside the u.s focusing on green energy growth Again, Chip, one of the things we do well as a company is really managing our SG&A level and keeping that increase under control. again chip one of the things we do well as a company is really managing our sg&a level and keeping that increase under control I would not anticipate a significant increase over FY 2025. i would not anticipate a significant increase over fy 2025 Does that answer your question? does that answer your question

Speaker 5: Yes, just thoughts on the RF side. Yes, just thoughts on the RF side. yes just thoughts on the rf side

Speaker 7: Right. Our RF tube business still remains about $85 million. We're going through a period where our largest supplier is actually going to exit the business over the next three to five years. A lot of that equipment and technology we own, so we're in the process of trying to determine if we move it back here or work with other tube manufacturers around the world. It has put us in a position where we built up our inventory very substantially. On the other hand, that inventory, tubes are like good or fine wine. You know, they are under vacuum and they last forever. We have no issue as far as obsolescence on the tubes, but our difficulty at this point is finding other manufacturers or making a decision to bring some of that manufacturing back here. Right. right Our RF tube business still remains about $85 million. our rf tube business still remains about $85 million We're going through a period where our largest supplier is actually going to exit the business over the next three to five years. we're going through a period where our largest supplier is actually going to exit the business over the next three to five years A lot of that equipment and technology we own, so we're in the process of trying to determine if we move it back here or work with other tube manufacturers around the world. a lot of that equipment and technology we own so we're in the process of trying to determine if we move it back here or work with other tube manufacturers around the world It has put us in a position where we built up our inventory very substantially. it has put us in a position where we built up our inventory very substantially On the other hand, that inventory, tubes are like good or fine wine. on the other hand that inventory tubes are like good or fine wine You know, they are under vacuum and they last forever. you know they are under vacuum and they last forever We have no issue as far as obsolescence on the tubes, but our difficulty at this point is finding other manufacturers or making a decision to bring some of that manufacturing back here. we have no issue as far as obsolescence on the tubes but our difficulty at this point is finding other manufacturers or making a decision to bring some of that manufacturing back here Over the next three or four years, our inventory will go down dramatically as far as that's concerned. The business stays extremely profitable and we're pleased to be pretty much sole source on tubes around the world. Over the next three or four years, our inventory will go down dramatically as far as that's concerned. over the next three or four years our inventory will go down dramatically as far as that's concerned The business stays extremely profitable and we're pleased to be pretty much sole source on tubes around the world. the business stays extremely profitable and we're pleased to be pretty much sole source on tubes around the world

Speaker 5: Okay, that's great. Did you see, I thought you said you saw a pickup in that core business in the quarter and some more positive signs? Okay, that's great. okay that's great Did you see, I thought you said you saw a pickup in that core business in the quarter and some more positive signs? did you see i thought you said you saw a pickup in that core business in the quarter and some more positive signs

Speaker 7: In the tube business? I think it's just about level. What we are seeing is a pickup in the semi-fab equipment manufacturing business. You know, we follow LAM's quarterly vendor meetings and listen to them, and they're talking about a very positive increase in their business going forward. In the best year, we did about $40 million with LAM and people in that business. I think right now we're running in the low $20 million, Wendy, somewhere. We see an opportunity to grow substantially in that business going forward. In the tube business? in the tube business I think it's just about level. i think it's just about level What we are seeing is a pickup in the semi-fab equipment manufacturing business. what we are seeing is a pickup in the semi-fab equipment manufacturing business You know, we follow LAM's quarterly vendor meetings and listen to them, and they're talking about a very positive increase in their business going forward. you know we follow lam's quarterly vendor meetings and listen to them and they're talking about a very positive increase in their business going forward In the best year, we did about $40 million with LAM and people in that business. in the best year we did about $40 million with lam and people in that business I think right now we're running in the low $20 million, Wendy, somewhere. i think right now we're running in the low $20 million wendy somewhere We see an opportunity to grow substantially in that business going forward. we see an opportunity to grow substantially in that business going forward

Speaker 3: On the RF solid-state side, if you bring to that, because that was business that we were in before, that also grew. We're seeing a large uptick in military, defense, RF communications, drones, and, of course, SATCOM globally to get 5G to all these remote areas. That's the business that picked up and that's where the growth was on the solid-state side. On the RF solid-state side, if you bring to that, because that was business that we were in before, that also grew. on the rf solid-state side if you bring to that because that was business that we were in before that also grew We're seeing a large uptick in military, defense, RF communications, drones, and, of course, SATCOM globally to get 5G to all these remote areas. we're seeing a large uptick in military defense rf communications drones and of course satcom globally to get 5g to all these remote areas That's the business that picked up and that's where the growth was on the solid-state side. that's the business that picked up and that's where the growth was on the solid-state side

Speaker 5: Okay, that's what I was asking. Thanks for the clarification. That sounds like that sector, the defense side, is pretty hot across the board. Do you see kind of accelerating participation into that end market? Okay, that's what I was asking. okay that's what i was asking Thanks for the clarification. thanks for the clarification That sounds like that sector, the defense side, is pretty hot across the board. that sounds like that sector the defense side is pretty hot across the board Do you see kind of accelerating participation into that end market? do you see kind of accelerating participation into that end market

Speaker 3: Yeah, and it's, you know, because of this global infrastructure that Ed put in place decades ago, it really is a benefit to a company like us. We're seeing a lot of the drone manufacturers are in Europe and we have a great team there. It's military too, but we're seeing also urban development, homeland security, disaster management, forest fires. I mean, drone technology is expanding very, very fast. We have some of the, if not the best, technology partners like MACOM, Qorvo, 3R Wave that have great products for that. We're participating in it and that's where the growth is on the solid-state RF and the microwave side. Yeah, and it's, you know, because of this global infrastructure that Ed put in place decades ago, it really is a benefit to a company like us. yeah and it's you know because of this global infrastructure that ed put in place decades ago it really is a benefit to a company like us We're seeing a lot of the drone manufacturers are in Europe and we have a great team there. we're seeing a lot of the drone manufacturers are in europe and we have a great team there It's military too, but we're seeing also urban development, homeland security, disaster management, forest fires. it's military too but we're seeing also urban development homeland security disaster management forest fires I mean, drone technology is expanding very, very fast. i mean drone technology is expanding very very fast We have some of the, if not the best, technology partners like MACOM, Qorvo, 3R Wave that have great products for that. we have some of the if not the best technology partners like macom qorvo 3r wave that have great products for that We're participating in it and that's where the growth is on the solid-state RF and the microwave side. we're participating in it and that's where the growth is on the solid-state rf and the microwave side

Speaker 5: Okay, thank you. Okay, thank you. okay thank you

Speaker 8: I would now like to turn the conference back to Ed for closing remarks. I would now like to turn the conference back to Ed for closing remarks. i would now like to turn the conference back to ed for closing remarks

Speaker 7: Thank you very much for following our progress and growth. We're really pleased with the performance of the company. If you have further questions, please feel free to call us at any time. Thank you very much. Thank you very much for following our progress and growth. thank you very much for following our progress and growth We're really pleased with the performance of the company. we're really pleased with the performance of the company If you have further questions, please feel free to call us at any time. if you have further questions please feel free to call us at any time Thank you very much. thank you very much

Speaker 8: This concludes today's conference call. Thank you for participating. You may now disconnect. This concludes today's conference call. this concludes today's conference call Thank you for participating. thank you for participating You may now disconnect. you may now disconnect