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Richardson Electronics Announces Strategic Transaction for its Richardson Healthcare Business Unit

1. RELL sold majority of healthcare assets to DirectMed Imaging. 2. The deal includes a 10-year global supply agreement for CT X-ray tubes. 3. RELL will consolidate remaining healthcare operations into PMT segment. 4. Transaction aligns with RELL's focus on Green Energy Solutions. 5. Streamlining aims to improve financial model and prioritize growth markets.

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Why Bullish?

The divestment aligns with strategic growth areas, potentially boosting RELL's valuation. Similar actions by companies focusing on high-growth sectors have historically led to stock price increases.

How important is it?

The asset sale represents a significant shift in RELL's business strategy, impacting future operations. A strong strategic focus on growth markets is likely to attract investor interest and enhance future performance.

Why Long Term?

The consolidation and strategic realignment likely position RELL for sustainable growth. Long-term gains are expected as the company focuses on core profitable segments, similar to previous strategic shifts by other firms.

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DMGESIEGYPHG
January 24, 2025 16:15 ET  | Source: Richardson Electronics, Ltd. Majority of Richardson Healthcare Assets Sold to DirectMed Imaging Remaining Healthcare Business to be Consolidated into the Company’s PMT Strategic Business Unit LAFOX, Ill., Jan. 24, 2025 (GLOBE NEWSWIRE) -- Richardson Electronics, Ltd. (NASDAQ: RELL), a global provider of engineered solutions for renewable energy and other power management applications, today announced the strategic asset sale of a majority of Richardson Healthcare to DirectMed Imaging (“DirectMed”). The transaction closed on January 24, 2025. Under the terms of the transaction, Richardson Electronics sold a substantial portion of the Richardson Healthcare reportable segment to DirectMed. Additionally, Richardson Electronics entered into an exclusive 10-year global supply agreement in which Richardson will supply DirectMed with repaired Siemens CT X-ray tubes. Richardson Electronics will also continue manufacturing ALTA CT X-ray tubes for DirectMed for approximately 12 to 18 months. The remaining assets and operations of the Richardson Healthcare reportable segment, primarily CT X-ray tube manufacturing and repair, will be consolidated into the Company’s PMT reportable segment. “Today’s announcement is aligned with our strategic priorities by reallocating assets to support our fast-growing Green Energy Solutions business. We look forward to an ongoing partnership with DirectMed, which we believe is a win-win for both companies. In addition, we believe today’s announcement will simplify our business, improve our financial model, and allow us to prioritize profitable opportunities within our higher growth markets,” said Edward J. Richardson, Chairman, CEO, and President. Additional information on the transaction will be found in an 8-K to be filed with the U.S. Securities and Exchange Commission. FORWARD-LOOKING STATEMENTS This release includes certain “forward-looking” statements as defined by the Securities and Exchange Commission. Statements in this press release regarding the Company’s business that are not historical facts represent “forward-looking” statements that involve risks and uncertainties. For a discussion of such risks and uncertainties, which could cause actual results to differ from those contained in the forward-looking statements, see Item 1A, “Risk Factors” in the Company’s Annual Report on Form 10-K filed on August 5, 2024, and other reports we file with the Securities and Exchange Commission. The Company assumes no responsibility to update the “forward-looking” statements in this release as a result of new information, future events or otherwise. About Richardson Electronics, Ltd. Richardson Electronics, Ltd. is a leading global manufacturer of engineered solutions, green energy products, power grid and microwave tubes, and related consumables; power conversion and RF and microwave components, including green energy solutions; high-value replacement parts, tubes, and service training for diagnostic imaging equipment; and customized display solutions. Approximately 50% of our products are manufactured in LaFox, Illinois, Marlborough, Massachusetts, or Donaueschingen, Germany, or by one of our manufacturing partners throughout the world. All our partners manufacture to our strict specifications and per our supplier code of conduct. We serve customers in the alternative energy, healthcare, aviation, broadcast, communications, industrial, marine, medical, military, scientific, and semiconductor markets. The Company's strategy is to provide specialized technical expertise and "engineered solutions" based on our core engineering and manufacturing capabilities. The Company provides solutions and adds value through design-in support, systems integration, prototype design and manufacturing, testing, logistics, and aftermarket technical service and repair through its global infrastructure. More information is available at www.rell.com. Richardson Electronics common stock trades on the NASDAQ Global Select Market under the ticker symbol RELL. About DirectMed Imaging DirectMed Imaging is a leading aftermarket diagnostic imaging parts, systems, and service provider. With over 100,000 parts in stock, the company repairs, supports, and sells GE, Siemens, Philips, and Canon/Toshiba MRI, CT, and X-ray parts to healthcare networks, imaging centers, and independent service organizations (“ISOs”) around the world. DirectMed also owns LBN Medical ApS, based in Aalborg, Denmark, a leading reseller of aftermarket medical imaging equipment and parts to customers around the world; and ScanMed, LLC, a leader in MRI coil design, manufacture, and repair. For more information, visit www.DirectMedImaging.com. For Details Contact: Wendy DiddellChief Operating Officer and GM, Richardson HealthcarePhone: (630) 208-2323wendyd@rell.com Corporate Headquarters40W267 Keslinger RoadPO BOX 393LaFox, IL 60147-0393 USA(630) 208-2200 | Fax: (630) 208-2550

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