ANNUAL MEETING OF STOCKHOLDERS October 4, 2016 Safe Harbor - PowerPoint PPT Presentation

ANNUAL MEETING OF STOCKHOLDERS October 4, 2016

Safe Harbor Statement During the course of this presentation, the Company may make certain "forward-looking" statements as defined by the SEC. Such statements regarding the Company's business which are not historical facts represent "forward-looking statements" that involve risks and uncertainties. Actual results could differ materially from those contained in the forward-looking statements due to risks and uncertainties contained under "Risk Factors" in the Company's Annual Report on Form 10-K. The Company assumes no responsibility to update the forward- looking statements as a result of new information, future events, or otherwise. 2

Agenda • Introductions: Edward J Richardson • Formal Proceedings: Bill Seils • Company Overview: Edward J. Richardson • FY16 Financials: Robert Ben • Power & Microwave Technologies: Greg Peloquin • Richardson Healthcare: Pat Fitzgerald • Canvys: Jens Ruppert • Q&A: Edward J. Richardson 3

Introductions • Board of Directors • Edward J. Richardson, Chairman of the Board, Chief Executive Officer & President • Paul J. Plante, Owner, Florida Fresh Vending; former President and CEO of Reptron • Jacques Belin, Retired Managing Director of Thales Components and Subsystems • James Benham, Technical Consultant, Night Vision and Microwave Device Industry; Retired President of L-3 Communications/Electron Device Division • Kenneth Halverson, Consultant, Halverson Consulting, LLC; former President of Comdisco Healthcare 4

Introductions • Independent Auditors • Giovanni Bernardi of BDO • REL Management Team • Robert Ben, EVP and Chief Financial Officer • Wendy Diddell, EVP Chief Operating Officer • Pat Fitzgerald, EVP Richardson Healthcare • Greg Peloquin, EVP Power & Microwave Technologies Group • Jens Ruppert, EVP Canvys 5

Formal Proceedings Bill Seils Former General Counsel Richardson Electronics

Company Overview Edward J. Richardson Chairman of the Board, Chief Executive Officer & President

ENGINEERED SOLUTIONS We provide power, microwave, and imaging components to industries worldwide. The Company’s strategy is to provide specialized technical expertise and “engineered solutions” based on our core engineering and manufacturing capabilities. Richardson Electronics provides solutions and adds value through design-in support, system integration, prototype design and manufacturing, testing, logistics, and aftermarket technical service and repair through its global infrastructure.

Founded in 1947, Richardson Electronics, Ltd. has a rich and unique history Facts and Figures of engineering, manufacturing and distributing power grid and microwave tubes and related consumables, and customized display solutions. • Headquarters: La Fox, Illinois (near Chicago) • NASDAQ: RELL • Web Site: www.rell.com • FY2016 Sales: $142 million – PMT: $105.5 million – Canvys: $23.5 million – Healthcare: $13 million • • Strong Balance Sheet: $70.5 million Locations: Global network of 40+ in cash and investments sales offices and stocking locations with legal entities in 24 countries • Employees: 375+; more than half in • sales, engineering and product Share Repurchases and Dividends management since March 2011 : $82 million • • Customer base: 20,000 customers Acquisitions since March 2011 : $20 million • Certifications : ISO9001:2008 and ISO13485

Corporate Objectives • Realize year over year double digit growth through investments in high growth markets: • Healthcare • Power Management • Protect our existing electron device business and market share through continued strong sales, marketing and engineering support • Return the Company to profitability by the end of FY17 Our highest return on investment will be achieved by leveraging the power of our global infrastructure and capitalizing on the strength of our customer relationships .” — Edward J. Richardson, Chairman, CEO 10

Our Challenges • Instability in the world markets • Euro devaluation • Brexit • China • Latin America • US election • The complexity of our business relative to the size of the business • Global structure is required to service our core business • Will be an asset as we expand in new power management and healthcare markets • Power grid tube market declining at an average rate of 5% per year • Some offset from price increases • Still opportunity to take market share • Time for key initiatives to take hold and generate significant revenue growth 11

Our Path Forward • The power grid tube business remains a key element of our business — it is healthy and provides the cash to cover our fixed expense. • We are counting on REL Healthcare to change the perception of the company — having a reliable CT tube supply is critical to this success! • We will work hard to conserve cash to ensure we continue to invest in our growth initiatives. • We will consider acquisitions when they make good business sense • Do they contribute to our objectives? • Are they priced right (we don’t pay high multiples)? • Is the management team solid and a good cultural fit (all we are really buying is people and their relationships)? • We will look for ways to improve operational efficiency • We will carefully control inventory purchases • Capital expenditures will be primarily related to establishing CT manufacturing and the expansion of healthcare • We will continue to look at share repurchases opportunistically 12

FY16 Financials Robert Ben

FISCAL 2016 RESULTS FY2016 FY2015 Actual Reported Net sales $ 142,016 $ 136,957 Cost of sales 97,181 95,819 Gross margin 44,835 41,138 gross margin % 31.6% 30.0% SG&A expenses 51,632 49,229 % of net sales 36.4% 35.9% Gain on disposal of assets (244) (5) Operating income (loss) (6,553) (8,086) % of net sales -4.6% -5.9% Investment/interest income (562) (999) Foreign exchange (gain) loss 212 (185) Other, net 17 92 Total other income (333) (1,092) Income (loss) from continuing before taxes (6,220) (6,994) Income tax provision (benefit) 546 (1,466) Income (loss) from continuing operations $ (6,766) $ (5,528) % of net sales -4.8% -4.0% Income (loss) from discontinued operations - (31) Net income (loss) $ (6,766) $ (5,559) 14

FISCAL 2016 BALANCE SHEET FY 2016 FY 2015 May 28, Feb 27, Nov 28, Aug 29, May 30, 2016 2016 2015 2015 2015 Cash & Investments: $ 60,454 $ 60,205 $ 67,863 $ 68,426 $ 74,535 Cash 2,268 3,537 3,719 6,342 23,692 ST investments 7,799 7,772 7,897 10,511 11,549 LT investments $ 70,521 $ 71,514 $ 79,479 $ 85,279 $ 109,776 Working Capital: Accounts Receivable $ 24,928 $ 20,881 $ 21,041 $ 23,989 $ 20,753 Inventories 45,422 45,533 43,126 41,188 38,769 Accounts Payable (14,896) (12,732) (13,583) (14,293) (15,768) Working Capital $ 55,454 $ 53,682 $ 50,584 $ 50,884 $ 43,754 15

FISCAL 2016 CASH POSITION Beginning YTD Oper Capital Stock Cash Cash Use IMES Expenditures Repurchase Dividends FX Effects Ending Cash 120,000 109,776 100,000 (13,584 ) (12,209 ) 80,000 (4,813) 70,521 thousands (5,015 ) (766) (3,079) 60,000 40,000 20,000 0

Strategic Business Unit Overview

Power & Microwave Technologies Greg Peloquin

PMT Strategy – Solving customer problems • Focus on technology partnerships with leaders in electron devices, power semiconductors, and RF/Microwave components and systems. • Global relationship and capabilities to bring those products to market and to support those products through engineering, design, and logistics support. • Growth is in the RF, Power, and Microwave niche markets – we differentiate ourselves in attacking these markets through: • Global infrastructure • Demand creation – field engineering • Niche products and markets • Disruptive technology and legacy products • Existing strong customer and supplier relationships • Focus on bringing new products and technologies while maximizing our market share with legacy products to support our global customers and suppliers problems. 19

FY16 Highlights • Successfully launched our new technologies business unit. • Added 20 new suppliers • Technologies covered: GaN, MOSFETS, SiGe, Ultra-capacitors, IGBTs • Expanded our customer base • Major prototype orders received from key customer programs which should accelerate revenue growth in the second half of FY17. • Added key suppliers for EDG which allowed us to increase market share • Photonis TWTs • Expansion of MPD agreement • Expanded the laser consumables product line — bellows • Capitalized on the Covimag acquisition with major government order in Q4. • Backlog grew with book to bill ratio consistently over 1 overall and even greater in the new technologies business. 20