Frequency Electronics, Inc. Announces Third Quarter Fiscal Year 2019 Results
15 March 2019 - 8:45AM
Frequency Electronics, Inc. (NASDAQ-FEIM) reported revenues for the
third quarter of fiscal 2019, which ended January 31, 2019, of
$13.2 million compared to $10.6 million in the third quarter of
fiscal 2018. Revenues for the first nine months of fiscal
2019 were $36.3 million compared to $31.9 million recorded in the
same period of the prior year. The Company recorded a $0.4 million
operating loss for the third quarter of fiscal 2019, compared to an
operating loss of $7.3 million in the third quarter of fiscal
2018. Operating loss for the first nine months of fiscal 2019
was $0.5 million compared to $9.0 million in the first nine months
of fiscal 2018. Net loss from continuing operations for the
third quarter of fiscal 2019 was ($0.3) million or ($0.04) per
diluted share compared to net loss ($10.1) million or ($1.15) per
diluted share for the third quarter of the prior year. Net
loss from continuing operations for the first nine months of fiscal
2019 was ($0.2) million or ($0.02) per diluted share compared to
net loss to ($10.6) million or ($1.20) per diluted share for the
first nine months of fiscal 2018.
Martin Bloch, FEI’s Executive Chairman of the
Board commented, “We remain on track to achieve substantial revenue
growth this full fiscal year and beyond. I am delighted that in the
third quarter, and since, we have received new space related
contract awards with great potential for long term growth.”
Stanton Sloane, CEO, commented, “I am pleased
with our increasing revenue and improved operating margin in the
3rd quarter. That trend, combined with the high level of proposal
activity we have underway, bodes well for continued top line and
bottom line growth. As we continue to focus on improving
profitability in our Asian and Elcom subsidiaries, we are also
sustaining robust investments in research and development of new
products and technologies. It is very encouraging to see these
efforts start to positively affect our financial results.”
Selected Fiscal 2019 Financial Metrics
and Other Items
- For the nine months ended January 31, 2019 satellite related
revenues, both for Government/DOD and commercial end use were
approximately $17.3 million compared to $11.4 million for the same
period of fiscal 2018. Commercial and U.S. Government
satellite payload programs accounted for approximately 48% of
consolidated revenues, compared to 36% for the same period of
fiscal 2018.
- For the nine months ended January 31, 2019 sales for non-space
related U.S. Government/DOD, end use were $17.1 million compared to
$13.9 million for the same period of fiscal 2018. Sales for
U.S. Government/DOD non-space end use accounted for approximately
47% of consolidated revenues compared to 44% of consolidated
revenues for the same period of fiscal 2018.
- Sales for other commercial and industrial applications were
approximately $2.0 million for fiscal 2019 compared to $6.6 million
for the same period of fiscal 2018. Commercial and industrial
applications accounted for approximately 5% of consolidated
revenues, compared to 21% for the same period of the prior
year.
- Gross margin rate for the nine months of fiscal 2019 increased
to 34.1% as compared to 12.1% during the same period of fiscal
2018. For the nine and three month period ended January 31,
2019 gross margin and gross margin rate increased over the same
period in fiscal 2018. The prior year’s gross margin and gross
margin rate was effected by a $5.0 million inventory write downs,
lower revenues, increased repair costs and unabsorbed manufacturing
overhead costs.
- Research and development expense were to $5.1 million for the
nine months of fiscal 2019 comparable to $5.1 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 continues to be engaged in recruiting additional
key physicists, engineering, marketing and manufacturing
personnel.
- Backlog at the end of the third quarter of fiscal 2019 rose to
$39 million from $30 million at the end of the previous fiscal year
end.
Investor Conference Call
As announced on March 11, 2019, the Company will
hold a conference call to discuss these results on Thursday, March
14, 2019, at 4:30 PM Eastern Time. Investors and analysts may
access the call by dialing 1-844-369-8770. International
callers may dial 862-298-0840. Ask for the Frequency
Electronics conference call.
The call will be archived on the Company’s
website through June 14, 2019. The archived call may also be
retrieved at 1-877-481-4010 (domestic) or 1-919-882-2331
(international) using Conference ID #: 45324 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 Electronic Warfare (“EW”) 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) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nine Months ended |
|
Three Months Ended |
|
January 31, |
|
January 31, |
|
2019 |
|
2018 |
|
|
2019 |
|
2018 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues |
$ |
36,345 |
|
$ |
31,932 |
|
|
$ |
13,193 |
|
$ |
10,572 |
|
Cost of Revenues |
|
23,953 |
|
|
28,060 |
|
|
|
9,093 |
|
|
13,424 |
|
Gross
Margin |
|
12,392 |
|
|
3,872 |
|
|
|
4,100 |
|
|
(2,852 |
) |
Selling and
Administrative |
|
7,838 |
|
|
7,796 |
|
|
|
2,657 |
|
|
2,749 |
|
Research and
Development |
|
5,094 |
|
|
5,071 |
|
|
|
1,837 |
|
|
1,708 |
|
Operating
Loss |
|
(540 |
) |
|
(8,995 |
) |
|
|
(394 |
) |
|
(7,309 |
) |
Interest and Other,
Net |
|
410 |
|
|
1,179 |
|
|
|
133 |
|
|
50 |
|
Income (Loss) before
Income Taxes |
|
(130 |
) |
|
(7,816 |
) |
|
|
(261 |
) |
|
(7,259 |
) |
Income Tax Benefit |
|
38 |
|
|
2,750 |
|
|
|
60 |
|
|
2,848 |
|
Net Income (Loss) from
Continuing Operations |
|
(168 |
) |
|
(10,566 |
) |
|
|
(321 |
) |
|
(10,107 |
) |
Loss from Discontinued
Operations, net of tax |
|
- |
|
|
(697 |
) |
|
|
- |
|
|
(289 |
) |
Net
Income (Loss) |
$ |
(168 |
) |
$ |
(11,263 |
) |
|
$ |
(321 |
) |
$ |
(10,396 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Income (Loss) per
share: |
|
|
|
|
Basic and
diluted income (loss) from continued operations |
$ |
(0.02 |
) |
$ |
(1.20 |
) |
|
$ |
(0.04 |
) |
$ |
(1.15 |
) |
Basic and
diluted loss earnings from discontinued operations |
$ |
0.00 |
|
$ |
(0.07 |
) |
|
$ |
0.00 |
|
$ |
(0.03 |
) |
Basic and
diluted income (loss) per share |
$ |
(0.02 |
) |
$ |
(1.27 |
) |
|
$ |
(0.04 |
) |
$ |
(1.18 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average Shares
Outstanding |
|
|
|
|
Basic |
|
8,899 |
|
|
8,836 |
|
|
|
8,928 |
|
|
8,846 |
|
Diluted |
|
8,899 |
|
|
8,836 |
|
|
|
8,928 |
|
|
8,846 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Frequency Electronics, Inc. and
SubsidiariesCondensed Consolidated Balance
Sheets(in thousands) |
|
|
|
|
|
|
|
January 31, |
|
April 30, |
|
2019 |
|
2018 |
|
(unaudited) |
|
(audited) |
ASSETS |
|
|
|
|
|
Cash
& Marketable Securities |
$ |
10,860 |
|
$ |
14,018 |
Accounts Receivable |
|
7,312 |
|
|
4,268 |
Costs
and Estimated Earnings |
|
|
in Excess of Billings, net |
|
7,282 |
|
|
5,094 |
Inventories |
|
25,065 |
|
|
26,186 |
Other
Current Assets |
|
1,294 |
|
|
2,509 |
Property, Plant & Equipment |
|
13,783 |
|
|
14,127 |
Other
Assets |
|
18,652 |
|
|
17,382 |
|
$ |
84,248 |
|
$ |
83,584 |
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS’ EQUITY |
|
|
|
|
|
Current Liabilities |
$ |
4,564 |
|
$ |
5,257 |
Other
Long-term Obligations |
|
15,093 |
|
|
15,065 |
Stockholders’ Equity |
|
64,591 |
|
|
63,262 |
|
$ |
84,248 |
|
$ |
83,584 |
|
|
|
|
|
|
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