Frequency Electronics Announces Results for 3rd Quarter Fiscal 2004
MITCHEL FIELD, N.Y.--(BUSINESS WIRE)--March 10, 2004--Frequency Electronics, Inc. (AMEX-FEI) today announced that revenues for the third quarter of fiscal year 2004, which ended 31 January 2004, were $14.1 million, up over 40% compared to $10.0 million for the preceding quarter of fiscal 2004 and $9.4 million in the third quarter of fiscal 2003. For the nine month period ended 31 January 2004, revenues were $32.8 million, up 34% compared to $24.5 million in the first nine months of the previous fiscal year.
In the third quarter, the Company recorded net income of $333,000 ($0.04 per diluted share) compared to a net loss of $234,000 ($0.03 per diluted share) for the preceding quarter, and net income of $239,000 ($0.03 per diluted share) in the same quarter of fiscal 2003. For the nine month period ended 31 January 2004, the Company recorded a net loss of $643,000 ($0.08 per diluted share) compared to a break-even result in the first nine months of fiscal 2003.
Chairman of the Board, General Joseph Franklin said: "The strong uptrend in revenues and operating results is continuing. Bookings were exceptionally high during this past quarter, approaching $20 million, the highest for any comparable period at FEI. Accordingly, our outlook remains very positive for the rest of this fiscal year and beyond."
Revenues from FEI's largest business segment, Commercial Communications, rose to $8.0 million during the third quarter of fiscal 2004, up from $6.1 million in the preceding quarter and $4.9 million in the same period of fiscal 2003. For the nine month period ended 31 January 2004, revenues were $19.0 million, up from $12 million in the same period last year. Margins increased substantially over fiscal 2003. Nine month revenues included $1.5 million from commercial satellite business, an increase of over 50% from the total for this business for all of fiscal 2003.
Third quarter revenues for the US Government segment were $1.7 million, compared to $2.0 million in the preceding quarter and $2.6 million in the same period last year. For the nine month period ended 31 January 2004, revenues were $5.3 million compared to $6.9 million in the same period last year. Revenues from this segment were derived principally from initial and early development work on major DOD multi-year programs. Also during this quarter FEI was awarded a $1.0 million contract for the next-phase development of secure radio timing systems.
Third quarter revenues for Gillam-FEI were $2.7 million, up from $1.2 million in the preceding quarter and $2.1 million in the same period last year. For the nine month period ended 31 January 2004, revenues were $5.2 million, compared to $6.1 million in the first nine months of fiscal 2003. During this quarter Gillam recorded an operating loss of $772,000, which included a $305,000 restructuring charge in connection with the phase-out of certain business operations at SATEL, its French subsidiary, and $457,000 in research and development expenses principally for the US5G. Both the restructuring at SATEL and the US5G development have been substantially completed.
Revenues for FEI-Zyfer, acquired at the beginning of fiscal 2004, were $2.0 million during this quarter, up from $912,000 and $1.1 million, respectively, in the two preceding quarters. FEI-Zyfer achieved its first profitable quarter with operating income of $102,000, compared to a net loss of $1.1 million in the preceding six months.
Reviewing the Company's progress, Martin Bloch, President and Chief Executive Officer, said: "I am especially pleased to report that Gillam-FEI has developed an exceptional synchronization system in the US5G, with features and cost-effectiveness that should be very well received by U.S. telecommunication service providers. We expect to realize significant returns both here and at Gillam-FEI from our investments in the US5G. FEI-Zyfer, the newest member of the FEI family, has already made important contributions to our new timing systems for deep earth energy exploration and for military applications, and is ahead of schedule in reaching profitability. In our commercial satellite business, results indicate the beginning of a strong upturn. We are well prepared to take advantage of the many opportunities that lie ahead for FEI."
About Frequency Electronics
Frequency Electronics, Inc. is a world leader in the design, development and manufacture of high-technology frequency, timing and synchronization products for voice, video and data telecommunications delivered by satellite or terrestrial means for both commercial and DOD customers. The Company's technologies provide unique solutions that are essential building blocks for the next generation of broadband wireless and fiber optic communications systems, for critical defense applications and for the ongoing expansion of existing wireless and wireline networks. Additional information is available on FEI'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 Consolidated Condensed Summary of Operations
Quarter Ended Nine Months Ended January 31, January 31, 2004 2003 2004 2003 ------ ------ ------- ------ (unaudited) (unaudited) (in thousands except per share data)
Net Sales $14,052 $9,390 $32,831 $24,518 Cost of Sales 9,279 6,317 22,171 16,769 --------- -------- -------- -------- Gross Margin 4,773 3,073 10,660 7,749
Selling and Administrative 2,945 2,099 8,134 6,041 Restructuring Charge 305 - 431 - Research and Development 1,394 1,269 4,309 2,941 --------- -------- -------- -------- Operating Profit (Loss) 129 (295) (2,214) (1,233)
Interest and Other, Net 357 625 1,539 1,206 --------- -------- -------- -------- Income (Loss) before Taxes & Minority Interest 486 330 (675) (27) Minority Interest (25) (16) (132) (38) --------- -------- -------- -------- Income (Loss) before Income Taxes 511 346 (543) 11 Income Tax Provision 178 107 100 10 --------- -------- -------- -------- Net Income (Loss) $ 333 $ 239 $ (643) $ 1 ========= ======== ======== ======== Net Income (Loss) per Share: Basic $ 0.04 $ 0.03 $ (0.08) $ 0.00 ====== ====== ======== ====== Diluted $ 0.04 $ 0.03 $ (0.08) $ 0.00 ====== ====== ======== ====== Average Shares Outstanding Basic 8,379,375 8,318,481 8,364,837 8,330,367 ========= ========= ========= ========= Diluted 8,589,893 8,390,162 8,364,837 8,393,651 ========= ========= ========= =========
Frequency Electronics, Inc. and Subsidiaries Consolidated Condensed Balance Sheets
January 31, April 30, 2004 2003 (in thousands) ASSETS Cash & Marketable Securities $ 30,521 $ 33,781 Accounts Receivable 14,023 9,565 Inventories 22,869 17,734 Other Current Assets 6,532 6,856 Property, Plant & Equipment 11,608 11,105 Other Assets 7,299 6,688 ---------- --------- $ 92,852 $ 85,729 ========== ========= LIABILITIES AND STOCKHOLDERS' EQUITY Current Liabilities $ 11,759 $ 5,922 Long-term Obligations and Other 17,886 18,098 Stockholders' Equity 63,207 61,709 ----------- --------- $ 92,852 $ 85,729 =========== =========
CONTACT: Frequency Electronics, Inc.
General Joseph P. Franklin, 516-794-4500
Website: www.frequencyelectronics.com
SOURCE: Frequency Electronics, Inc.