Frequency Electronics, Inc. Announces First Quarter Fiscal Year 2024 Financial Results

MITCHEL FIELD, N.Y., Sept. 14, 2023 (GLOBE NEWSWIRE) -- Frequency Electronics, Inc. (“FEI” or the “Company”) (NASDAQ-FEIM) is reporting revenues for the first quarter ended July 31, 2023, of approximately $12.4 million, compared to revenues of $8.2 million, for the first quarter of fiscal year 2023, ended July 31, 2022. Operating income for the first quarter of fiscal year 2024 was $2.1 million compared to an operating loss of $3.1 million for the same period of fiscal year 2023. Net Income from operations was $2.0 million or $0.22 per diluted share compared to a net loss from operations of $3.1 million or ($0.33) per diluted share for the first quarter of fiscal year 2023

FEI President and CEO, Tom McClelland commented, “In the first quarter of fiscal year 2024 we continued to see the results of the cost cutting efforts and management reorganization which has taken place over the last year. Revenue and gross margin have increased substantially compared to the first quarter of fiscal year 2023, and the Company is reporting an operating profit of $2.0M compared to an operating loss of $3.1M in the same quarter of last year. Although the operating profit for the quarter is affected by several one time items, even without these items the Company would have reported an operating profit of slightly over $1M. The backlog of $51.8M at the end of Q1 is close to the historic high at the end of FY2023, and is up dramatically compared to $39.7M at the end of Q1 last year. More importantly, bookings are expected to increase the backlog significantly over the next two quarters. I believe our efforts have put us on a sustainable positive trajectory. The Company remains committed to achieving sustained profitability and cash generation going forward.”

Fiscal Year 2024 Selected Financial Metrics and Other Items

• For the three months ended July 31, 2023, revenues from satellite payloads were approximately $4.9 million, or 39%, of consolidated revenues compared to $3.5 million, or 42%, for the same period of the prior year.
  
  
• For the three months ended July 31, 2023, revenues for non-space U.S. Government/DOD customers were $6.9 million, or 55%, of consolidated revenues compared to $4.1 million, or 50%, for the same period of the prior year.
  
  
• For the three months ended July 31, 2023, revenues from other commercial and industrial sales accounted for approximately $672,000, or 5%, of consolidated revenues compared to approximately $664,000, or 8%, for the same period of the prior year.
  
  
• Net cash used in operations was $2.8 million in the first quarter of fiscal year 2024, compared to net cash used in operations of $3.6 million for the same period of fiscal year 2023.
  
  
• Backlog at July 31, 2023 was approximately $52 million compared to $57 million at April 30, 2023.
  

Investor Conference Call

As previously announced, the Company will hold a conference call to discuss these results on Thursday, September 14, 2023, at 4:30 PM Eastern Time. Investors and analysts may access the call by dialing 1-888-506-0062. International callers may dial 1-973-528-0011. Callers should provide participant access code: 782267 or ask for the Frequency Electronics conference call.

The archived call may be accessed by calling 1-877-481-4010 (domestic), or 1-919-882-2331 (international), for one week following the call (replay passcode: 48702). Subsequent to that, the call can be accessed via a link available on the Company’s website through October 12, 2023.

About Frequency Electronics

Frequency Electronics, Inc. is a world leader in the design, development and manufacture of high precision timing, frequency generation and RF control 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 electronic warfare, missiles, UAVs, aircraft, GPS, secure communications, energy exploration and wireline and wireless 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 Electronic Warfare (“EW”) sub-systems and state-of-the-art RF microwave products. Additional information is available on the Company’s website: www.frequencyelectronics.com

Forward-Looking Statements

The statements in this press release regarding future earnings and operations and other statements relating to 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, the risks associated with health epidemics and pandemics, including the COVID-19 pandemic and similar outbreaks, such as their impact on our financial condition and results of operations and on our ability to continue manufacturing and distributing our products, and the impact of health epidemics and pandemics on general economic conditions, including any resulting recession, our inability to integrate operations and personnel, actions by significant customers or competitors, general domestic and international economic conditions, 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, other supply chain related issues, increasing costs for materials, operating related expenses, competitive developments, changes in manufacturing and transportation costs, the availability of capital, the outcome of any litigation and arbitration proceedings, and failure to maintain an effective system of internal controls over financial reporting. The factors listed above are not exhaustive and should be read in conjunction with the other cautionary statements that are included in this release and in our filings with the Securities and Exchange Commission. The Company’s Annual Report on Form 10-K fiscal year ended April 30, 2023, filed on July 27, 2023 respectively, with the Securities and Exchange Commission includes additional factors that could materially and adversely impact the Company’s business, financial condition and results of operations, as such factors are updated from time to time in our periodic filings with the Securities and Exchange Commission, which are accessible on the Securities and Exchange Commission’s website at www.sec.gov. Moreover, the Company operates in a very competitive and rapidly changing environment. New factors emerge from time to time and it is not possible for management to predict the impact of all these factors on the Company’s business, financial condition or results of operations or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements. Given these risks and uncertainties, investors should not rely on forward-looking statements as a prediction of actual results. Any or all of the forward-looking statements contained in this press release and any other public statement made by the Company or its management may turn out to be incorrect. The Company expressly disclaims any obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.

Contact information:		Dr. Thomas McClelland, President and Chief Executive Officer;
		Steven Bernstein, Chief Financial Officer;
TELEPHONE:		(516) 794-4500 ext.5000		WEBSITE:		www.freqelec.com

Frequency Electronics, Inc. and Subsidiaries Condensed Consolidated Statements of Operations (in thousands except per share data)
	Three Months Ended
	July 31,
	(unaudited)
	2023				2022
Revenues	$	12,408			$	8,204
Cost of Revenues		7,540				8,209
Gross Margin		4,868				(5	)
Selling and Administrative		2,302				1,992
Research and Development		506				1,110
Operating income (loss)		2,060				(3,107	)
Interest and Other, Net		(11	)			(9	)
Income (loss) before Income Taxes		2,049				(3,116	)
Provision for Income Taxes		7				1
Net income (loss)	$	2,042			$	(3,117	)
Net income (loss) per share:
Basic and diluted income (loss) per share	$	0.22			$	(0.33	)
Weighted average shares outstanding
Basic and Diluted		9,384				9,308

Frequency Electronics, Inc. and Subsidiaries Condensed Consolidated Balance Sheets (in thousands)
	July 31, 2023				April 30, 2023
	(unaudited)
ASSETS
Cash and cash equivalents	$	9,061			$	12,049
Accounts Receivable, net		6,385				4,622
Contract Assets		11,028				10,009
Inventories, net		22,604				20,526
Other Current Assets		1,185				1,101
Property, plant, and equipment, net		6,778				7,093
Other Assets		11,868				11,714
Right-of-Use Assets – Operating Leases		7,062				7,382
	$	75,971			$	74,496
LIABILITIES AND STOCKHOLDERS’ EQUITY
Lease Liability - current	$	1,766			$	1,753
Contract Liabilities		18,356				18,586
Other Current Liabilities		6,758				6,942
Other Long-term Obligations		8,404				8,446
Operating Lease Liability – non-current		5,518				5,883
Stockholders’ Equity		35,169				32,886
	$	75,971			$	74,496