MITCHEL FIELD, N.Y.,
The Company recorded an operating loss of
Net loss for the third quarter of fiscal 2018 was
Commenting on these results and the business outlook, Chairman of the Board Joel Girsky said:
“While the last three and nine months results continued to be impacted by previously discussed delays in satellite related orders, change is underway at FEI. We expect over
The tax asset write-down is the result of the new income tax regulation of
Fiscal 2018 Selected Financial Metrics and Other Items:
- For the nine months ended
January 31, 2018, satellite payload revenues both US Government/ DODand Commercial were $11.4 millionand accounted for approximately 36% of consolidated revenues compared to $16.8 millionand 49% of consolidated revenues for the same prior year period, a $5.4 milliondecline, principally in commercial communication satellites.
- For the nine months ended
January 31, 2018, sales for U.S. Government/ DOD, non-space end use were $13.9 millionand accounted for approximately 44% of consolidated revenues compared to $12.9 millionand 37% of revenues for the same period last year.
- For the nine months ended
January 31, 2018, sales for other commercial and industrial applications were $6.6 millioncomparable to the $4.8 millionfor the same period last year.
- Gross margin rate for the nine months ended
January 31, 2018decreased to 12.1% as compared to 31.4% during the nine months of the same period last year. The gross margin and gross margin rate decrease is primarily due to a $5.0 millioninventory write-down. Absent the inventory write down, the gross margin would be 28%. The inventory write-down was taken in anticipation of the enforcement of recent mandates by European and U.S. space governing agencies restricting, except for limited exceptions the use of older space qualified materials. In addition, the Company anticipates the rate of use of other identified legacy space parts will decline due to obsolescence and evolution of current designs which require reduced size and weight as well as lower power consumption.
- Research and development expense for the nine months and three months ended
January 31, 2018was $5.1 millionand $1.7 millioncompared to $4.8 millionand $1.3 millionrespectively during the same period in the prior year. In response to new business opportunities and satellite payload systems innovation which requires technology development, FEI has increased its investments in R&D to ensure competitiveness for anticipated industry requirements.
- Cash provided by operations for the nine months ended
January 31, 2018was $2.8 millioncompared to $1.5 millionin the comparable fiscal year 2017 period. The increase in cash for the fiscal year 2018 period resulted primarily from an increase in accounts receivable collections, compared to the balances as of the end of the previous fiscal year.
- Liquidity remained at high levels with
$58 millionof working capital at January 31, 2018. Cash increased to $13.2 millionat the end of the period compared to $10 millionat the beginning of the fiscal year.
- Funded backlog at
January 31, 2018was $16 millioncompared to $28 millionat year end of the prior fiscal year. The Company anticipates a significant increase in bookings during the balance of the current and ensuing fiscal year.
Investor Conference Call
As previously announced, the Company will hold a conference call to discuss these results on
The call will be archived on the Company’s website through
Frequency’s Mission Statement: “Our mission is to provide precision time and low phase noise frequency generation systems from 1 Hz to 46 GHz, for space and other challenging environments.”
Subsidiaries and Affiliates: Gillam-FEI provides expertise in network synchronization and monitoring; FEI-Zyfer provides GPS and secure timing ("SAASM") capabilities for critical military and commercial applications; FEI-Asia provides cost effective manufacturing capabilities; FEI-Elcom Tech provides added resources for state-of-the-art RF microwave products. Frequency's
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
TELEPHONE: (516) 794-4500 WEBSITE: www.frequencyelectronics.com
Condensed Consolidated Statement of Operations
(in thousands except per share data)
|Nine Months ended
|Cost of Revenues||28,060||23,590||13,424||8,116|
|Selling and Administrative||7,796||8,483||2,749||2,834|
|Research and Development||5,071||4,832||1,708||1,337|
|Interest and Other, Net||1,179||309||50||96|
|Loss before Income Taxes||(7,816||)||(2,185||)||(7,259||)||(808||)|
|Provision (benefit) for income taxes||2,750||(1,392||)||2,848||(1,188||)|
|Net (Loss) Income from Continuing Operations||(10,566||)||(793||)||(10,107||)||380|
|Loss from Discontinued Operations, net of tax||(697||)||(599||)||(289||)||(42||)|
|Net (Loss) Income||$||(11,263||)||$||(1,392||)||$||(10,396||)||$||338|
|Basic and Diluted Net (Loss) Income per Share:|
|(Loss) Income from Continued Operations||$||(1.20||)||$||(0.09||)||$||(1.15||)||$||0.04|
|(Loss) Income from Discontinued Operations||$||(0.07||)||$||(0.07||)||$||(0.03||)||$||0.00|
|(Loss) Income per Share||$||(1.27||)||$||(0.16||)||$||(1.18||)||$||0.04|
|Average Shares Outstanding|
Condensed Consolidated Balance Sheets
|Cash & Marketable Securities||$||13,224||$||9,978|
|Costs and Estimated Earnings|
|in Excess of Billings, net||4,122||7,964|
|Other Current Assets||3,253||3,711|
|Current Assets Held for Sale||8,477||8,165|
|Property, Plant & Equipment||13,868||14,813|
|Non-Current Assets Held for Sale||531||569|
|LIABILITIES AND STOCKHOLDERS’ EQUITY|
|Current Liabilities Held for Sale||2,121||2,249|
|Other Long-term Obligations||14,982||14,661|
|Non-Current Liabilities Held for Sale||1,795||1,215|
Source: Frequency Electronics, Inc.