Frequency Electronics, Inc. Announces Second Quarter Fiscal Year 2019 Results
December 12 2018 - 4:00PM
Frequency Electronics, Inc. (NASDAQ-FEIM) reported revenues for the
second quarter of fiscal 2019, which ended October 31, 2018, of
$12.1 million compared to $9.3 million in the second quarter of
fiscal 2018. Revenues for the first six months of fiscal 2019
were $23.2 million compared to $21.3 million recorded in the same
period of the prior year. The Company recorded operating loss of
$230,000 for the second quarter of fiscal 2019, compared to an
operating loss of $1.9 million in the second quarter of fiscal
2018. Operating loss for the first six months of fiscal 2019
was $146,000 compared to $1.7 million in the first half of fiscal
2018. Net income for the second quarter of fiscal 2019 was
$122,000 or $0.01 per diluted share compared to net loss $1.5
million or ($0.17) per diluted share for the second quarter of the
prior year. Net income for the first six months of fiscal
2019 was $153,000 or $0.02 per diluted share compared the net loss
to $867,000 or ($0.10) per diluted share for the first half of
fiscal 2018.
Martin Bloch Executive Chairman of the Board
commented, “FEI is on track to achieve substantial revenue growth
this full fiscal year and beyond. In addition to the largest
dollar value of new bids outstanding, we also have the largest
amount of customer funded research and development under contract
in the company’s history. The level of internal R&D funding
will be maintained, as well, to ensure that we take advantage of
new business opportunities on the horizon. In order to support
these expanding opportunities, we have begun and will continue to
hire additional physicists, engineers, marketing staff and
manufacturing support personnel. These opportunities entail
programs where we have unique competencies namely secure
communications, navigation and command and control systems.”
Stanton Sloane, President & CEO stated, “I
am pleased with the continued progress we are making on many
fronts…hiring key staff, significant advancements on key technical
objectives, improving financial performance and increasing
operational efficiency. We now have the broadest, most robust
technology development portfolio ever. Compared to both our prior
fiscal year and prior quarter, revenue and backlog increased
sequentially, a solid indicator of improving performance. Inventory
management, as well, continues to improve and we continue to
streamline our manufacturing operations. Increasing revenues in the
second half of the fiscal year are expected to positively impact
gross margins with a resulting improvement in operating income. We
will also continue to rationalize our foreign subsidiary, which
will ultimately have a positive effect on the bottom line.”
Selected Fiscal 2019 Financial Metrics
and Other Items
- For the six months ended October 31, 2018 satellite related
revenues, both for Government/DOD and commercial end use were
approximately $11.3 million compared to $9.0 million for the same
period of fiscal 2018. Commercial and U.S. Government
satellite payload programs accounted for approximately 49% of
consolidated revenues, compared to 42% for the same period of
fiscal 2018.
- For the six months ended October 31, 2018 sales for non-space
related U.S. Government/DOD, end use were $10.4 million compared to
$7.7 million for the same period of fiscal 2018. Sales for
U.S. Government/DOD non-space end use accounted for approximately
45% of consolidated revenues compared to 36% of consolidated
revenues for the same period of fiscal 2018.
- Sales for other commercial and industrial applications were
approximately $1.4 million for fiscal 2019 compared to $4.7 million
for the same period of fiscal 2018. Commercial and industrial
applications accounted for approximately 6% of consolidated
revenues, compared to 22% for the same period of the prior
year.
- Gross margin rate for the six months of fiscal 2019 increased
to 35.8% as compared to 31.5% during the same period of fiscal
2018. The increase in gross margin rate was due to increased
revenues, lower repair costs and favorable product mix.
- Research and development expense were to $3.3 million for the
six months of fiscal 2019 comparable to $3.4 million for the same
period of fiscal 2018. For the balance of the fiscal year research
and development activity will include a significantly higher level
of customer funded R&D.
- The Company is actively engaged in recruiting additional key
physicists, engineering, marketing and manufacturing
personnel.
- Backlog at the end of the second quarter of fiscal 2019 rose to
$38 million from $21 million for the second quarter of the prior
year.
Investor Conference Call
As announced on December 10, 2018, the Company
will hold a conference call to discuss these results on Wednesday,
December 12, 2018, at 4:30 PM Eastern Time. Investors and
analysts may access the call by dialing 1-877-407-9205.
International callers may dial 1-201-689-8054. Ask for the
Frequency Electronics conference call.
The call will be archived on the Company’s
website through March 12, 2019. The archived call may also be
retrieved at 1-877-481-4010 (domestic) or 1-919-882-2331
(international) using Conference ID #: 13685798 for one week
following the call.
About Frequency Electronics
Frequency Electronics, Inc. is a world leader in
the design, development and manufacture of high precision timing,
frequency control and synchronization products for space and
terrestrial applications. Frequency’s products are used in
satellite payloads and in other commercial, government and military
systems including C4ISR and EW markets, missiles, UAVs, aircraft,
GPS, secure radios, energy exploration and wireline and wireless
communication networks. Frequency has received over 100
awards of excellence for achievements in providing high performance
electronic assemblies for over 150 space and DOD programs.
The Company invests significant resources in research and
development to expand its capabilities and markets.
Frequency’s Mission Statement: “Our mission is
to provide precision time and low phase noise frequency generation
systems from 1 Hz to 50 GHz, for space and other challenging
environments.”
Subsidiaries and Affiliates: FEI-Zyfer provides
GPS and secure timing ("SAASM") capabilities for critical military
and commercial applications; FEI-Elcom Tech provides sub-systems
for the Electronic Warfare (“EW”) markets and added resources for
state-of-the-art RF microwave products, FEI-Asia provides cost
effective manufacturing capabilities. Frequency's Morion
affiliate supplies high-quality, cost effective oscillators and
quartz components for commercial applications. Additional
information is available on the Company’s website:
www.frequencyelectronics.com
Safe Harbor Statement under the Private
Securities Litigation Reform Act of 1995:
The Statements in this press release regarding
the future constitute "forward-looking" statements pursuant to the
safe harbor provisions of the Private Securities Litigation Reform
Act of 1995. Forward-looking statements inherently involve
risks and uncertainties that could cause actual results to differ
materially from the forward-looking statements. Factors that
would cause or contribute to such differences include, but are not
limited to, inability to integrate operations and personnel,
actions by significant customers or competitors, general domestic
and international economic conditions, consumer spending trends,
reliance on key customers, continued acceptance of the Company's
products in the marketplace, competitive factors, new products and
technological changes, product prices and raw material costs,
dependence upon third-party vendors, competitive developments,
changes in manufacturing and transportation costs, the availability
of capital, and other risks detailed in the Company's periodic
report filings with the Securities and Exchange Commission.
By making these forward-looking statements, the Company undertakes
no obligation to update these statements for revisions or changes
after the date of this release.
Contact information: Stanton Sloane, President, Chief
Executive Officer: Steven Bernstein, Chief Financial Officer;Martin
Bloch, Executive Chairman of the Board: Telephone: (516)
794-4500
WEBSITE: www.frequencyelectronics.com
Frequency Electronics, Inc. and
SubsidiariesCondensed Consolidated Statement of
Operations (unaudited)(in thousands except per
share data)
|
Six Months endedOctober 31, |
|
Three Months EndedOctober 31, |
|
|
2018 |
|
2017 |
|
2018 |
|
2017 |
|
Revenues |
$23,153 |
|
$21,360 |
|
$ 12,142 |
|
$ 9,337 |
|
Cost of Revenues |
14,860 |
|
14,636 |
|
8,123 |
|
7,134 |
|
Gross
Margin |
8,293 |
|
6,724 |
|
4,019 |
|
2,203 |
|
Selling and
Administrative |
5,182 |
|
5,046 |
|
2,642 |
|
2,335 |
|
Research and
Development |
3,257 |
|
3,364 |
|
1,607 |
|
1,734 |
|
Operating
Loss |
(146 |
) |
(1,686 |
) |
(230 |
) |
(1,866 |
) |
Interest and Other,
Net |
276 |
|
1,129 |
|
322 |
|
(7 |
) |
Income (Loss) before
Income Taxes |
130 |
|
(557 |
) |
92 |
|
(1,873 |
) |
Income Tax Benefit |
(23 |
) |
(98 |
) |
(30 |
) |
(584 |
) |
Net Income (Loss) from
Continuing Operations |
153 |
|
(459 |
) |
122 |
|
(1,289 |
) |
Loss from Discontinued
Operations, net of tax |
- |
|
(408 |
) |
- |
|
(192 |
) |
Net
Income (Loss) |
$ 153 |
|
$ (867 |
) |
$ 122 |
|
$ (1,481 |
) |
|
|
|
|
|
|
|
|
|
Net Income (Loss) per
share: |
|
|
|
|
|
|
|
|
Basic and
diluted income (loss) from continued operations |
$ 0.02 |
|
$(0.05 |
) |
$ 0.01 |
|
$ (0.15 |
) |
Basic and
diluted loss earnings from discontinued operations |
$ 0.00 |
|
$(0.05 |
) |
$ 0.00 |
|
$ (0.02 |
) |
Basic and
diluted income (loss) per share |
$ 0.02 |
|
$(0.10 |
) |
$ 0.01 |
|
$ (0.17 |
) |
Average Shares
Outstanding |
|
|
|
|
|
|
|
|
Basic |
8,885 |
|
8,830 |
|
8,893 |
|
8,835 |
|
Diluted |
9,046 |
|
8,830 |
|
9,102 |
|
8,835 |
|
|
|
|
|
|
|
|
|
|
Frequency Electronics, Inc. and
SubsidiariesCondensed Consolidated Balance
Sheets(in thousands)
|
October
31,2018(unaudited) |
|
April
30,2018(audited) |
|
|
|
|
ASSETS |
|
|
|
Cash
& Marketable Securities |
$ 11,252 |
|
$ 14,018 |
Accounts Receivable |
6,110 |
|
4,268 |
Costs
and Estimated Earnings |
|
|
|
in Excess of Billings, net |
7,047 |
|
5,094 |
Inventories |
25,648 |
|
26,186 |
Other
Current Assets |
1,623 |
|
2,509 |
Property, Plant & Equipment |
13,486 |
|
14,127 |
Other
Assets |
18,496 |
|
17,382 |
|
$83,662 |
|
$ 83,584 |
|
|
|
|
LIABILITIES AND STOCKHOLDERS’ EQUITY |
|
|
|
Current Liabilities |
$ 4,252 |
|
$ 5,257 |
Other
Long-term Obligations |
15,186 |
|
15,065 |
Stockholders’ Equity |
64,224 |
|
63,262 |
|
$83,662 |
|
$ 83,584 |
|
|
|
|
Frequency Electronics (NASDAQ:FEIM)
Historical Stock Chart
From Mar 2024 to Apr 2024
Frequency Electronics (NASDAQ:FEIM)
Historical Stock Chart
From Apr 2023 to Apr 2024