Frequency Electronics Announces Results for 3rd Quarter FY 2002
These results reflect the continuing effects of the general slowdown in the telecommunications infrastructure market as sales and profits in the same quarter of fiscal 2001 were $15.19 million and $1.63 million ($0.19 per share), respectively. For the nine months ended January 31, 2002, revenues were $32.1 million compared to $34.9 million in the fiscal 2001 nine-month period. Net income for the nine months of fiscal 2002 was $1.96 million or $0.23 per diluted share compared to net income of $3.91 million and $0.46 per share in fiscal 2001. General Joseph Franklin, Chairman of the Board, noted: "The significant upturn in telecommunications and government business, which we anticipated early in fiscal 2002, has not yet occurred. However, we are very pleased that the Company is able to generate profits and positive cash flow from operations while making significant investment both in new products and in new markets during a difficult period for the industry. Major new products are scheduled to be introduced in calendar 2002."
Operating profit was $98,000 and $1.50 million for the three- and nine-month periods of fiscal 2002, respectively. This is compared to operating profit of $1.73 million and $3.79 million in the same periods of fiscal 2001. In addition to lower revenues, operating profits were affected by 20% higher R&D spending and by Gillam-FEI margins, which have improved but trail the other operating segments. The Company continues to expect Gillam-FEI to make a positive contribution to overall profits for the full fiscal year.
Revenues for Gillam-FEI were $2.45 million for the third quarter and $7.08 million for the nine months ended January 31, 2002. Fiscal 2002 revenues for the other segments of the Company aggregated $7.12 million for the quarter and $25.02 million for the nine months. Gross margins for the non-Gillam-FEI segments were approximately 40% for the third quarter and 41% for the nine months of fiscal 2002. According to Alan Miller, Chief Financial Officer, "Achieving this level of performance is significant. Being able to generate healthy margins in a weak environment provides a springboard for superior results as revenues increase."
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 satellite and terrestrial voice, video and data telecommunications. The Company's technologies provide unique solutions that are essential building blocks for the next generation of broadband wireless and fiber optic communications systems, 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,
2002 2001 2002 2001
---- ---- ---- ----
(unaudited) (unaudited)
(in thousands except per share data)
Net Sales $9,565 $15,193 $32,100 $34,905
Cost of Sales 5,939 9,361 19,963 20,470
------- -------- -------- --------
Gross Margin 3,626 5,832 12,137 14,435
Selling and
Administrative 2,163 2,967 6,404 7,145
Research and
Development 1,365 1,134 4,235 3,500
------- -------- -------- --------
Operating
Profit 98 1,731 1,498 3,790
Interest and
Other, Net 388 828 1,382 2,142
------- -------- -------- --------
Income before
Taxes &
Minority
Interest 486 2,559 2,880 5,932
Minority
Interest 10 3 2 4
------- -------- -------- --------
Income before
Income Taxes 476 2,556 2,878 5,928
Income Tax
Provision 150 923 920 2,018
------- -------- -------- --------
Net Income $ 326 $ 1,633 $ 1,958 $ 3,910
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Net Income
per Share:
Basic $ 0.04 $ 0.20 $ 0.23 $ 0.48
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Diluted $ 0.04 $ 0.19 $ 0.23 $ 0.46
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Average Shares
Outstanding:
Basic 8,357,402 8,285,506 8,345,439 8,167,970
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Diluted 8,539,114 8,554,436 8,531,732 8,464,346
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Frequency Electronics, Inc. and Subsidiaries
Consolidated Condensed Balance Sheets
January 31, April 30,
2002 2001
---- ----
(in thousands)
ASSETS
Cash & Marketable Securities $34,198 $ 35,528
Accounts Receivable 12,408 15,160
Inventories 21,278 20,471
Other Current Assets 6,146 8,975
Property, Plant & Equipment 12,167 11,997
Other Assets 10,321 9,908
--------- ---------
$ 96,518 $102,039
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LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities $ 7,004 $ 13,534
Long-term Obligations and Other 18,056 18,300
Stockholders' Equity 71,458 70,205
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$ 96,518 $102,039
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CONTACT: Frequency Electronics, Inc., Mitchel Field
General Joseph P. Franklin, 516/794-4500
www.frequencyelectronics.com