Ladies and gentlemen, thank you for standing by, and welcome to the Richardson Electronics Earnings Call for the Second Quarter of Fiscal Year twenty twenty one. At this time, all participant lines are in a listen only mode. After the speakers' presentation, there will be a question and answer session. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Edward Richardson, CEO.
Thank you. Please go ahead, sir.
Good morning, and welcome to Richardson Electronics conference call for the second quarter of fiscal year twenty twenty one. Joining me today are Robert Ben, Chief Financial Officer Wendy Diddell, Chief Operating Officer and General Manager for Richardson Healthcare Greg Peliklin, General Manager of our Power and Microwave Technologies Group and Jens Ruppert, General Manager of Canvas. We're all calling in from remote locations. As a reminder, this call is being recorded and will be available for audio playback. I 'd also like to remind you that we'll be making forward looking statements, and 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. We're pleased with our results for the second quarter of fiscal year twenty twenty one. Even though COVID continues to challenge our employees, suppliers and customers throughout the world, everyone is pulled together to deliver the best results possible. Our sales in the second quarter were 7% above our second quarter last year prior to the pandemic.
In fact, our FY 'twenty one second quarter operating income of $852,000 was our best operating quarter since the first quarter of FY 'nineteen. The semiconductor wafer fabrication market continues to be strong, and we had good growth in the power and microwave group. We're also seeing improvement in many of our EDG product lines, including several significant wins with new OEMs. Within the health care segment, we sold more ALTA750 tubes than any prior quarter. We're very excited about this trend.
With Latin America system sales picking up, health care revenue improved again over the most recent quarter and exceeded last year's second quarter. Canvas sales, while down to the prior year, remained strong, and our customer relationships are solid. We accomplished this in the face of the pandemic and a rise in the number of COVID cases. I again say thank you to the entire Richardson team for being mindful of our guidelines for staying healthy and keeping the business running without disruption. This success would not be possible without everyone working together.
I'll now turn the call over to Bob Ben, who will provide a detailed recap of our second quarter and year to date performance. Then Greg, Wendy and Jens will discuss the individual business unit performance, our successes and our opportunities for the future growth.
Thank you, Ed, and good morning. I will review our financial results for our second quarter and first six months of fiscal year twenty twenty one, followed by a review of our cash position. Net sales for the second quarter of fiscal twenty twenty one increased to $42,400,000 or 7% compared to net sales of $39,600,000 in the prior year second quarter, primarily due to higher net sales for PMT and Richardson Healthcare, partially offset by lower net sales for Canvas. PMT sales increased by 11.2% from last year's second quarter as a result of higher sales of semiconductor wafer fab equipment specialty products as well as power conversion and RF and microwave components. Power grid tube sales continue to be negatively impacted by the pandemic.
However, sales of certain product lines increased from the second quarter of fiscal twenty twenty. Richardson Healthcare sales increased $600,000 or 28.2%, primarily due to a significant increase in demand for the ALTA750 tubes, which experienced a record sales quarter. In addition, equipment sales increased in Latin America. Canvas net sales decreased by $1,200,000 or 14.7% due to the temporary decreased customer demand globally related to COVID-nineteen. Gross margin for the quarter was 33.8% of net sales compared to 32% of net sales in last year's second quarter.
PMT margin increased to 34.2 from 31.6% due to a favorable product mix and improved manufacturing efficiencies. Canvas margin as a percent of net sales also increased to 35.5% from 32.9% as a result of its product mix. Healthcare margin as a percent of net sales was 25.6% in the second quarter of fiscal twenty twenty one compared to 34.3% in the prior year second quarter, primarily due to under absorbed manufacturing expenses related to tube development and manufacturing improvements. Operating expenses were $13,500,000 for the second quarter of fiscal twenty twenty one compared to $13,200,000 in the second quarter of fiscal twenty twenty. The increase in operating expenses resulted from a $300,000 increase in legal expense and from our normal employee compensation expenses, including annual merit increases.
These increases were partially offset by lower travel and consulting expenses. Throughout the pandemic, the company decided to support its employees through regular merit increases and incentive plans, and by avoiding layoffs or furloughs. As a result, the company reported an operating income of $900,000 for the second quarter of fiscal twenty twenty one as compared to an operating loss of $500,000 in the second quarter of last year. Other expense for the second quarter of fiscal twenty twenty one, including interest income and foreign exchange, was $100,000 the same as in the second quarter of fiscal twenty twenty. The income tax provision of $100,000 for the quarter reflected a provision for foreign income taxes, which was lower than in the prior year's second quarter and no U.
S. Tax benefit due to the valuation allowance recorded against the net operating loss. Although there is no tax benefit shown on our financial statements from U. S. Net operating losses, we can use our net operating losses to offset any cash tax liability reported in our U.
S. Federal income tax return. The amount of federal NOLs is $17,600,000 We had a net income of $700,000 for the second quarter of fiscal twenty twenty one as compared to a net loss of $600,000 in the second quarter of fiscal twenty twenty. Earnings per common share on a diluted basis in the second quarter of fiscal twenty twenty one was $0.05 Turning to a review of the results for the first six months of fiscal year twenty twenty one. Net sales for the first six months of fiscal year twenty twenty one were $81,200,000 an increase of 1.2% from the first six months of fiscal year twenty twenty net sales of 80,300,000.0 Net sales increased by $3,000,000 or 5% for PMT, but decreased by $1,700,000 or 11.4% for Canvas and $400,000 or 7% for Richardson Healthcare.
Gross margin increased to 32.9% from 31.9%, primarily reflecting favorable product mix in PMT and Canvas and improved manufacturing performance for PMT. Operating expenses were $26,500,000 for the first six months of the fiscal year, which represented an increase of $500,000 from the first six months of the last fiscal year. The increase was due to higher legal and employee compensation expenses, partially offset by lower travel and consulting expenses. Operating income for the first six months of the fiscal year twenty twenty one was $200,000 as compared to an operating loss of $400,000 for the first six months of fiscal year twenty twenty. Other expense for the first six months of fiscal twenty twenty one, including interest income and foreign exchange, was $500,000 as compared to other income of $200,000 for the first six months of fiscal twenty twenty.
Income tax provision of $200,000 primarily reflected a provision for foreign income taxes, which was lower than the prior year's first six months and no U. S. Tax benefit due to the valuation allowance recorded against the net operating loss. We had a net loss of $500,000 for the first six months of fiscal year twenty twenty one, the same as in the first six months of fiscal year twenty twenty. We continue to closely manage our cash position.
Cash and investments at the end of the second quarter of fiscal twenty twenty one were $46,000,000 compared to $42,500,000 at the end of the first quarter of fiscal twenty twenty one and $46,100,000 at the end of the second quarter of fiscal twenty twenty. Capital expenditures were $600,000 in the second quarter of fiscal twenty twenty one compared to $500,000 in the second quarter of fiscal year twenty twenty. Approximately $300,000 related to our health care business, dollars 200,000.0 was for our IT system, and $100,000 was for our manufacturing business. On a year to date basis, capital expenditures totaled 1,300,000.0 as compared to $800,000 in the first six months of fiscal twenty twenty. Free cash flow was 3,900,000 for the second quarter of fiscal twenty twenty one compared to $100,000 in the second quarter of fiscal twenty twenty.
We paid $800,000 in dividends in the second quarter of fiscal twenty twenty one. In addition, based on our current financial position, our Board of Directors declared a quarterly dividend of $06 per common share, which will be paid in the third quarter of fiscal twenty twenty one. Now I'll turn the call over to Greg, who will discuss the results for our Power and Microwave Technologies Group.
Thank you, Bob, and good morning, everyone. PMT sales in the second quarter of fiscal year twenty twenty one were $32,900,000 versus $29,600,000 in Q2 FY 'twenty. Our gross margin increased in the quarter to 34.2 versus 31.6% in the prior year. Gross margin improved in both EDG and PMG through new designs and engineered solutions. In terms of revenue, our engineered solutions products supporting the semiconductor wafer fab equipment market had an extremely strong quarter.
We also continue to see strong growth in our power and microwave group. This was led by our growing line of technology partners supporting five gs infrastructure as well as alternative energy power management applications. COVID-nineteen continued to hurt our MRO business. However, we did see quarter over quarter growth in our legacy tube business. We saw an extremely positive booking trend in both EDG, our Electronic Device Group and PMG, our Power and Microwave Group.
Our book to bill in the quarter was 1.24. The increase in EVG was driven by our semiconductor wafer fab customers and our legacy tube business coming back. The increase in PMG bookings is a combination of our new technology partners' products, our global demand creation model, numerous design wins, high growth markets and a very unique global business model. Even with the strong quarter results, I believe COVID-nineteen did have a slowdown effect on our business. I continue to use the word slowdown because we have proven again in Q2 the demand for our products and services did not go away with the pandemic.
In fact, we are very excited about the booking trends again this quarter. Its growth in Q2 sales and bookings was amplified as we continue to look extensively at how to do things differently to achieve success now and in the future. We developed several unique strategies to support our global customers' designs and products while working with the restrictions on travel and face to face meetings. These strategies included adding technology partners where we have technology gaps in our current key markets. This continued in Q2 with the addition of Quantum Microwave and new products from these same key technology partners, which will be key to our customers working in five gs and microwave communication products.
We also increased communication to customer and supplier focused webinars and major web upgrades. Richardson's global go to market strategy has allowed us to grow multiple business opportunities during the pandemic through creative processes and communication procedures. We are committed not only to bounce back, but to bounce forward coming out of this pandemic. The Q2 results saw excellent progress in this strategy. This quarter, we continue to see support from our key technology partners such as Qorvo, MACOM, Anokiwave, United Sick, LSMtron and Fuji Microwave.
Key tube manufacturers in the industry such as CPI, Thales, NGRC, and Photonics worked with us to manage customer requirements. Our in house engineering and manufacturing teams did a great job supporting increased demand from our global semiconductor wafer fab customers in addition to designing and introducing new products for key growth markets. With respect to five gs and wireless sales, revenues increased by double digits again in Q2. As the need continues to grow for people to work from home, the city, the country and their cars, they must be able to send and receive large amounts of data from any of these locations quickly. Especially during and coming out of this pandemic, I cannot stress enough the value of Virgin Electronics' model to our customers and suppliers.
Our unparalleled capability and global go to market strategy are unique to the power and RF microwave industries. We developed a very strong business model of legacy products and new technology partners to go with our engineered solutions capabilities. Through our steadfast and creative focus on customers, we will survive this pandemic by taking advantage of opportunities when they arise. The demand for our products has not gone away. Our customers and technology partners need Richardson's products and support more than ever.
And with that, I'll turn it over to Wendy Zedell in Richardson Healthcare.
Thanks, Greg, and good morning, everyone. Second quarter was much stronger for the health care division. Over the summer, hospitals began to reopen for elective procedures and equipment maintenance. This trend continued throughout the fall. We reported last quarter that we sold more ALTA750D tubes than any prior quarter other than q three of FY twenty.
We are pleased to announce that in our second quarter, we sold more tubes than any prior quarter. As anticipated, a higher percentage of our tubes are still being sold in Europe. We also had a good mix of sales throughout The US and Latin America. In the second quarter, we restarted tube production. We are still experiencing some component delays and resource constraints due to COVID, so production was not at full capacity.
We anticipate reaching our planned production levels in the third quarter. As a result, healthcare revenue in Q2 exceeded Q1 and also surpassed second quarter last year. Sales in the quarter were $2,800,000 an increase of 50.9% over the first quarter and 28.2% better than sales in Q2 of last year. Sales of parts, equipment and tubes all increased over prior year's second quarter. Gross margin improved to 25.6% from 5.6% in q one.
Margin was down versus prior year second quarter margin of 34.3%. We're in a good stock position for Canon parts, including the newer prime scanners. We are still facing a lack of used CT scanners, which will limit our system sales throughout the year. Our system sales depend on hospitals changing out systems. This is not happening as frequently during the pandemic.
Supply will continue to be constrained until the pandemic is under control and financial performance in the health care industry improves. In the third quarter, we are launching our reloading program in China, which will drive incremental tube sales. New tube development is also going well, although we have some component delays due to COVID. Assuming there are no major setbacks, we are on track to launch the Alta seven fifty g by the middle of calendar year 2021. We are also making good progress on our next tube program.
There are three tubes in this series. They will be phased in as repair processes are validated. We anticipate launching these solutions later in calendar year 2021 and extending into 2022. We are finalizing schedules with our auditors to secure registrations for our new tubes. We are also working on a schedule for our MDSAP audit.
This will set the stage for tube sales in Canada and several other countries. We remain cautiously optimistic that performance will continue to improve. With rising COVID cases and a vaccine just rolling out, we know conditions can change overnight. I will now turn the call over to Jens Ruppert to discuss the results for Canvas.
Thanks, Wendy, and good morning, everyone. Canvas, which includes the engineering, manufacturing and sale of custom displays to original equipment manufacturers in industrial and medical markets, delivered a good performance with sales of €6,700,000 during the second quarter of fiscal twenty twenty one, a decrease of 14.7% over the same period last year. Customer demand decreased temporarily due to the coronavirus and the resulting business impact on the OEMs globally. Gross margin as a percentage of sales was 35.5% during the second quarter of fiscal twenty twenty one, up from 32.9% during the second quarter of fiscal twenty twenty. The increased gross margin was related to a favorable product mix and foreign currency effect.
Our healthy backlog, along with a number of projects that are currently in the engineering stage, position us well for continued growth before considering any long term impact of COVID-nineteen. It is nearly impossible to predict when our business will return to normal, but we are optimistic that our business will improve in the second half of fiscal twenty twenty one. One significant headwind is panel supply. The robust demand for televisions in The U. S.
And China, combined with capacity reductions by the panel makers, is leading to LCD panel price increases and longer lead times. The shortages of some key components such as integrated circuit parts could further compound the situation, pushing panel prices even higher. LCD panel supply was also negatively impacted by a strong earthquake in Northeastern Taiwan and a power outage impacting a key class of strad supplier in Japan. The loss of power damaged the feeders that move molded clasts from the furnace to the forming process. It will take several months to repair these.
This Japanese supplier is an important supplier to AUO, LG, Analogues and other well known LCD manufacturers. We have seen dramatic price increases on passive components and cables as well, which brings us to the value adds that Candus offers our customers. Due to our long term relationships with key suppliers and driven by their future commitments for relatively large and growing procurement numbers, we avoided most of the product price increases. Additionally, we avoid any supply chain disruption by carrying components and finished goods in our inventory. We are compensating for a lack of face to face customer visits and trade shows during the pandemic by focusing on web marketing.
We successfully launched our new responsive website in November. The website with a new look and focus that now also offers multiple application stories started to attract more visitors and potential clients. We are confident that our online strategy will result in new leads and business growth. During the quarter, we received several new orders from both existing and first time medical OEM customers. Some of these include: corneal cross linking, a minimally invasive procedure to stiffness to corneas that have been weakened by disease or refractive surgery radiofrequency ablation used interrupting pain signals such as those coming from irritated facet joints in the spine Refractive surgery, a laser system for therapeutic and refractic applications of corneal surgery Surgical navigation, a system for tracking the location of surgical instruments throughout a procedure intravascular imaging systems systems that allow physicians to acquire images of diseased vessels from inside the artery, patient monitoring and robotic assisted surgical platforms to improve precision and accuracy in spine surgery.
In the non medical space, we received orders for various display products. Applications include displays and all in ones, monitors where the PC is integrated. Our products are used to control product dispensers in retail stores and in control rooms for railway applications. They also include touchscreens designed to assist harsh environmental conditions for ticketing machines in the public transportation market. From the verity of customers and applications as well as the value of orders from existing and new customers, it is clear we offer our customers outstanding products and service.
While our sales organization stays focused on new opportunities, I will continue to review and adjust our business strategy to improve the operating performance of the division. Maximizing cash flow is an ongoing priority. We will continue to work with our partners to help reduce inventory while being able to meet the demand of our customers, particularly during this pandemic. I will now turn the call back over to Ed.
Thanks, Jens. Canvas has performed recent years, and we're confident growth will continue when the pandemic is under control. A significant percentage of your business is in the medical OEM market. As we know from our health care segment, the medical industry has been severely impacted by the coronavirus. It will be some time before hospitals are spending on new equipment.
In spite of the potential long term impacts of COVID and knowing we're not out of the woods yet, we're optimistic about the future. We're seeing growth initiatives improve revenue, profitability and cash flow. This is clearly reflected in health care and PMT performance. Our challenge now is to determine what changes we've made during the pandemic that should remain as part of our ongoing strategy for growth and improve profitability. We'll continue to carefully manage expenses and maximize cash flow.
We want to make sure we have funds available to support our growth initiatives and improve our financial returns. At this point, we'll be happy to answer a few questions.
Our first question comes from the line of Deane Trottier, a private investor. Your line is now open.
Hey, guys. Thanks for taking my question. Good morning, Deane. I was just wondering if you Good morning. I was just wondering if you could provide a little bit of color on the inventory levels?
Yes. With multiple business units, it changes from one to another. Certainly, it's requiring more inventory for PMT for the semiconductor portion of the business as the business grows. And also in the tube business, we saw an actual decline for a period of time which now seems to be coming back. And in that case, we buy inventory sometimes or schedule it a year in advance.
So the inventories were up there. But for the most part I think it's overall blended is pretty much normal. Even Canvas, for example, has had some additional inventory that they're carrying because customers have pushed out orders. On the other hand, right now, if we had more CT tubes, could sell more in the health care space, so the inventory levels are down there. So it's a sort of a mix between the SBUs.
Okay. Is it is it fair to say that as the the cloud of COVID sort of goes away that we shouldn't see meaningful rise in inventory going forward. Is that a fair from an outsider standpoint, is that fair to say?
Well, certainly in the EDG or the tube portion of the business, inventory levels will be reduced as the business picks up. But on the other hand, when you look at the power and microwave group in the semiconductor space, that business is growing 20%, thirty % a year and it takes additional inventory to service it. And also, you have, you know, more payables or receivables. So it's it's a mix. There will be an increase in inventory.
So far, we're pretty well pleased with our cash flow.
Okay. That's great. And then just kind of a broader capital allocation question as, you know, as the business is recovering or continuing to recover from some of the the lockdowns, where where is where is the priority from a capital allocation standpoint for for, you know, for the board and the executive team?
Well, certainly, we wanna fund the health care business. We've spent about $25,000,000 on equipment. We think we have the most modern CT manufacturing operation in the world right now. But the majority of the capital has been spent. And as you saw, the capital expenditures for healthcare was really moderate in both the quarter and the six months.
So what we're hopeful is once we can get healthcare to turn profitable that we go cash flow positive, but that's probably still two two or three years out, something like that. But the capital expenditures that you're seeing now are pretty much normal.
Okay. So I I paraphrasing, it's it's fair to say that there shouldn't be or there from for the health care business, there isn't a need for a significant amount of additional capital. It's sort of already been spent.
Right. We're always adding new equipment, but there isn't anything substantial coming.
Okay. That's it for me. Thanks so much.
Thanks, Dean.
Dean. Our next question comes from the line of Eric Landry from BMO Capital. Your line is now open.
Good morning.
Good morning, Eric.
So is it correct in assuming that we're basically in quarter number two for Richardson of the Wayfair cycle right now?
Semiconductor Wayfair fab business, is that what you're making reference to?
Yeah. We are we in basically the second quarter of an upturn here?
Yes. And, you know, our major customers there are predicting that in the the calendar year, this calendar year, that will continue to increase. And it certainly increased for us, as you can see. So it's it's good news. Good news part of that is the last time this occurred, business is sort of like a roller coaster.
We were working seven days a week to try to accommodate the customer's requirements. And this time we were well ahead of that. And we are in certain instances working six days a week but not seven. And we've become, have a new manufacturing manager since that last uptick and he's really efficient and has cross trained a lot of people in the assembly area. So we're well ahead of the curve and we can handle the uptick without jeopardizing delivery.
Okay. So I know these things tend to end abruptly. But by all accounts what your customers are telling you is that there's likely three to four quarters after this of strong growth in what is one of your most profitable businesses. Is that an accurate assessment?
Yes. Yeah, it's very accurate. And you know, the rollout of five gs, what that means that big companies like Samsung and Intel and others are adding capacity and building new wafer fabs. And that's where the tools and equipment go from our major customers. It's all good news.
They're also retooling older equipment, which is good for us as well.
Okay. Great. Ed, did I hear correctly that you said tube sales have been a little bit restricted by inventory constraints? Is that right?
Yes, we haven't been able to build CT tubes as fast as the customers have required them. First of all, did, as we had mentioned in the past, we shut down manufacturing of CT tubes for a quarter or so as we were trying to improve quality and we had a good inventory at that time. And we sort of got caught a little bit in between the, you know, by the time we got back into production, requirements had picked up and we're pretty much working hand to mouth right now.
So that to me sounds like a big change from what you were saying as recently as a quarter or two ago when you were having trouble even people taking calls to buy these things. So what what has changed here?
Well, we're doing really well in Europe and some of the EMEA countries. And so that's picked up a lot and it's also picked up in The United States. When we talk about large quantities, you know how expensive the tubes are. So it's not a matter of hundreds, it's a matter of tens. But at the same time, it's excellent business.
Okay.
So the okay. So so a matter of tens is gonna take a long, long time to fill that factory of yours, your your brand new fresh factory that has a capacity of a thousand units with three shifts. So we're still a long way away from that. Has there been any fresh thinking on how to get that factory up and running with a decent amount of tubes so that we can somehow make some money in health care here sooner than later?
Well, we're, you know, we're adding people. We're adding engineers. We're working Wendy, you might wanna address this, but we're working a partial second shift. What are some of the plans, Wendy, you're on top of that on a day to day basis?
Well, with the programs that we discussed in the call itself. So we've got the China reloading program coming on, and that's got good volume potential, Eric. I would also point out that that was the one area where I feel like we we missed the opportunity to ship some tubes in the second quarter was into the getting that China reloading program going sooner. Then as we pointed out, we've got the g coming online, and that will be mid mid this year, mid mid twenty twenty one, the calendar year. And then we have the new tube program, which, will come online throughout the year as as we validate these processes.
So those, you know, those three programs alone are going to fully cover us in the first and and possibly going in, as Ed already said, into a second shift. I think what you're looking for is have we made any progress on an OEM program where we would sell tubes to an OEM? And, you know, at this point, there's some irons in the fire, but there's nothing imminent. Our our top priority right now are the two programs I just mentioned, the d, the g, and the new repair program. And, all of the modeling that we're doing, by the way, is based on, you know, those series of tubes, and we will keep our eyes and ears open.
Obviously, we gotta be able to travel in order to really effectively look at any OEMs. They have to be able to come here. We have to be able to go there. So I think that's still a ways out before we're gonna see any true or meaningful effort on the OEM side.
The the new tube program, is that a is that a different manufacturer than Canon? Is that what you're talking about, or is this something entirely different than that?
It is. It is a different manufacturer. It's a different, different line.
Okay. And the So that is still on the design. Go ahead.
Yeah. The replacement volume for that particular manufacturer is much larger than Canon.
But that's
the only
thing mentioned, it's three tubes in that series, Eric. So it'll be, they'll be launched independently.
And that's at fiscal year twenty twenty two at the earliest type of event?
Yeah. I would say meaningful results. We, you know, we will likely start shipping at least one of the three earlier than that. But, again, we wanna make sure that the product that we're putting out there works, that it meets the warranty requirements, and then satisfy the customers. So to be conservative, I would say f y twenty two.
Okay. Last last question here. You you made mention of, first shift, almost fully absorbed. Did I is that correct? Did I hear that correctly?
With our if with full production, which we will be back in now we're actually back in full production now. We will be fully absorbed in the third quarter. We should be fully absorbed in the third quarter with one shift. Going to a second shift and a third shift helps leverage some of those costs.
Alright. May maybe I'm not interpreting this correctly, but that that does not mean 300 by 300 tube annual pace. Correct?
No. Probably not. I would have to go in and count the production with all the the three tube series. Sometimes we're running second shift because of an equipment. You know, we need to run scanners, for example.
When we're testing the g and we're we're putting that through its paces, it's very helpful to have, those scanners running twenty four seven. So we'll have people in here at night and on the weekends running scanners and tracking tube status. We may use ovens on second shift for bake out in some of the, the processes that require a longer period of time.
Alright. Well, thank you very much. I appreciate you taking all the questions.
Thanks, Eric.
Thank you. Our next question comes from the line of William Wilson, an individual investor. Your line is now open.
Good morning or good afternoon, and thank you for taking the call. Just ecstatic about your results there. But at the same time, I'm a little bit underinvested, and I'm just wondering how that would extrapolate to other investors that might be listening or potential investors, which brings to mind the question of whether you've been able to outreach to the investment community or whether that is something that, because of travel with the COVID, you're still able to do, I would think that that would present a great a forward looking opportunity once that breaks loose and you can get out the story about the company. But
Well, that's true. You know, in the past, we've done a lot of conferences, financial conferences and presentations and things of that nature. And, of course, with the COVID issue, that's all stopped. But certainly as the business continues to pick up and be profitable and as soon as the impact of the coronavirus is under control and there are financial conferences, again, we will be participating.
Okay. Great. And then I look at the look at the chart when you know, going back five years or so when I started investing or more than that, actually. And I see that, you know, we're about 50% at a minimum of what it was. And yet if I see the company correctly, you're at least twice as good as far as size, potential markets, products,
r
and d, manufacturing space, etcetera, etcetera. So my question is, is my perception way off there, or are you twice as good as you used to be five, ten years ago?
Well, we certainly agree with you. You know, we we think that, particularly addressing some of the markets that are growing rapidly like the healthcare space and also the power and microwave group for five gs and the semiconductor wafer fab business. Also, Canvas has a big market. We're really very optimistic about the future of the company. And we feel like you that the company is certainly undervalued as far as the market value on the street for sure.
Okay. And I'll let you go. But one quick last one, and this is kind of stretching it too. But south of the border, it would seem that you could only, for the tubes, grow by replacement. The idea of OI OEM would probably not come into play there.
But at the same time, if you look at, you know, the giant company Siemens or whatever who could potentially jump into the market and and and undercut your prices. Do you see, sales to South America, Latin America being a long term potential stabilizing factor there?
Yes. We we sell to Latin America. Currently, we sell a fair amount of equipment and also replacement tubes. And we install our new tubes in used equipment when the equipment is sold in Latin America. The problem we have there economies of the various countries in South And Latin America haven't been that good.
But it's certainly an excellent market. And you're correct, probably especially today, 95% of the tubes we sell are for replacement of existing equipment.
Yeah. Okay, well thank you very much. And again, we're ecstatic at this end.
Great, well thank you very much for the investment.
Okay.
At this time I'm showing no further questions. I would like to turn the call back over to Ed for closing remarks.
Okay. Well, thank you for joining us and for your ongoing interest in Richardson Electronics. We look forward to discussing our third quarter with you in April. And we hope by then we'll be thinking about seeing people face to face again. In the interim, we wish you continued good health and success.
Feel free to call us at any time.
Ladies and gentlemen, this concludes today's conference call. Thank you for participating. You may now disconnect.