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Frequency Electronics, Inc. Announces Fiscal Year 2016 Results

MITCHEL FIELD, N.Y., July 25, 2016 (GLOBE NEWSWIRE) -- Frequency Electronics, Inc. (NASDAQ:FEIM) reported revenues of $60.4 million for fiscal 2016, which ended April 30, 2016, compared to revenues of $76.6 million for fiscal 2015.  Operating profit for fiscal 2016 was $1.3 million compared to operating profit of $3.7 million for fiscal 2015.  Net income for fiscal 2016 was $1.0 million or $0.11 per diluted share compared to net income of $2.8 million or $0.32 per diluted share for fiscal 2015.

Commenting on these results, Chairman of the Board Joel Girsky said: "This past year major customers of ours experienced a significant reduction, roughly 50%, under the predicted rate of Commercial and Government satellite contract awards. Funding issues and imminent technical innovations gave rise to postponements and delays. In turn, Frequency's largest and long-term fastest growing business, satellite payloads, was impacted in bookings, revenues and in the introduction of new frequency converter products. Operating losses at subsidiaries further impacted consolidated results, which also effectively precluded meaningful M&A activity at the time. Despite these challenges, we took steps to remain profitable during the period and to generate positive cash flow. 

"On a highly positive note Frequency achieved great progress in our secure communications business.  FEI-Zyfer revenues grew 33% and operating profits doubled, reflecting this progress.  The overall opportunity in secure communications is enormous, comprising essentially all critical GPS dependent networks.

"Principal customers in the satellite industry tell us they expect an upturn in contract awards to become evident later in this current calendar year. Accordingly we anticipate a return to accelerating growth in bookings and revenues as that cyclical upturn occurs.  Going forward, we fully expect to take all the steps needed to create very substantial growth in value for shareholders."

Fiscal 2016 Selected Financial Metrics and Other Items:

Recent Events:

Investor Conference Call

As previously announced, the Company will hold a conference call to discuss these results on Monday, July 25, 2016, at 1:30 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 August 17, 2016.  The archived call may also be retrieved at 1-877-660-6853 (domestic) or 1-201-612-7415 (international) using Conference ID #: 13641735.

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 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 and strategic acquisitions world-wide 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 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 Morion affiliate supplies high-quality, cost effective oscillators and components.  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.

Frequency Electronics, Inc. and Subsidiaries
Condensed Consolidated Statement of Operations
      
  Quarter Ended  Year Ended
  April 30,  April 30,
   2016   2015    2016  2015 
  (unaudited)   (unaudited)  (audited) 
  (in thousands except per share data)
                 
Revenues $14,212  $19,200   $60,394 $76,564 
Cost of Revenues  9,499     13,887     39,958    53,016 
Gross Margin  4,713   5,313    20,436  23,548 
Selling and Administrative  3,138   3,659    13,205  14,207 
Research and Development    1,534     1,701      5,929    5,666 
Operating Profit(Loss)  41   (47)   1,302  3,675 
Interest and Other, Net     30      248      773    861 
Income before Income Taxes  71   201    2,075  4,536 
Income Tax Provision     170     260      1,070    1,710 
Net Income (Loss) $  (99) $  (59)  $  1,005 $  2,826 
                 
Net Income per Share:     
Basic $(0.01) $(0.01)  $0.12 $0.33 
Diluted $(0.01) $(0.01)  $0.11 $0.32 
Average Shares Outstanding                
Basic  8,744   8,643    8,728  8,611 
Diluted  8,744   8,643    8,937  8,910 
                 


Frequency Electronics, Inc. and Subsidiaries
Condensed Consolidated Balance Sheets
    
  April 30,April 30,
   2016   2015 
   (unaudited)   (audited) 
  (in thousands)
ASSETS   
Cash & Marketable Securities $17,193  $18,408 
Accounts Receivable  10,244   9,689 
Costs and Estimated Earnings   
in Excess of Billings, net  11,133   12,929 
Inventories  41,278   38,239 
Other Current Assets  4,463   4,334 
Property, Plant & Equipment  13,072   12,686 
Other Assets  22,831   21,540 
  $120,214  $117,825 
         
LIABILITIES AND STOCKHOLDERS' EQUITY   
Current Liabilities $8,758  $8,350 
Long-term Debt  6,000   6,000 
Other Long-term Obligations  12,104   11,665 
Stockholders' Equity  93,352   91,810 
  $120,214  $117,825 
         
Contact information: Martin Bloch, President, Chief Executive Officer: 
TELEPHONE: (516) 794-4500
WEBSITE: www.frequencyelectronics.com 

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