Frequency Electronics, Inc. Announces First Quarter Fiscal Year 2005 Results
MITCHEL FIELD, N.Y.--(BUSINESS WIRE)--Sept. 13, 2004--Frequency Electronics, Inc. (AMEX-FEI) today announced that revenues for the first quarter of fiscal year 2005, which ended 31 July 2004, were $17.7 million, compared to $17.3 million for the preceding quarter and $8.8 million in the first quarter of fiscal 2004.
In the first quarter, the Company recorded net income of $977,000 ($0.11 per diluted share) compared to net income of $805,000 ($0.09 per diluted share) for the preceding quarter, and a net loss of $742,000 ($0.09 per diluted share) in the same quarter of fiscal 2004.
Chairman of the Board General Joseph Franklin said: "We are very pleased to see the positive momentum that began in the last six months of fiscal 2004 continuing. We have gotten off to a good start, which reinforces our confidence that we will see increased revenues, improved margins, and greater profitability for the full fiscal year 2005."
Revenues from FEI's largest business segment, Commercial Communications, rose to $11.4 million during the first quarter of fiscal 2005, up from $4.9 million in the same period of fiscal 2004. Continuing a favorable trend, revenues for this quarter included $1.6 million from commercial satellite programs.
First quarter revenues for the US Government segment were $1.7 million, compared to $1.6 million in the first quarter of last year. There was no significant change from recent trends in DOD programs.
First quarter revenues for Gillam-FEI were $2.7 million, up from $1.3 million in the same period last year. During this quarter Gillam-FEI recorded an operating loss of $497,000, after $481,000 in R&D expenses for new product development with Company-wide applications. Further improvement in Gillam-FEI's operating results is expected during the balance of this fiscal year.
Revenues for FEI-Zyfer were $2.0 million during this quarter, up from $912,000 in the first quarter of fiscal 2004. Over half of FEI-Zyfer's revenues were derived from sales to the US Government.
Compared to the fourth quarter of fiscal 2004, gross margins rose from $4.9 million (28%) to $5.8 million (33%), operating profit increased from $568,000 to $1.2 million, and income before taxes rose from $816,000 to $1.6 million. SG&A remained steady at $3.3 million, while R&D expenses increased from $1.0 million to $1.2 million.
Commenting on the Company's first quarter, Chief Financial Officer Alan Miller said: "Our consolidated results reflect a healthy trend. Higher revenues are generating significant improvements in margins and operating results."
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
Condensed Consolidated Statement of Operations
Quarter Ended
July 31,
2004 2003
---- ----
(unaudited)
(in thousands except per share data)
Net Sales $ 17,683 $ 8,754
Cost of Sales 11,905 6,187
---------- ----------
Gross Margin 5,778 2,567
Selling and Administrative 3,293 2,536
Research and Development 1,236 1,668
---------- ----------
Operating Profit (Loss) 1,249 (1,637)
Interest and Other, net 395 700
---------- ----------
Income (Loss) before Taxes and
Minority Interest 1,644 (937)
Minority Interest in income
(loss) of subsidiary 19 (55)
---------- ----------
Income (Loss) before Income
Taxes 1,625 (882)
Income Tax Provision (Benefit) 648 (140)
---------- ----------
Net Income (Loss) $ 977 $ (742)
========== ===========
Net Income (Loss) per Common
Share:
Basic $ 0.12 $ (0.09)
========== ===========
Diluted $ 0.11 $ (0.09)
========== ===========
Average Common Shares
Outstanding:
Basic 8,434,618 8,348,133
========== ===========
Diluted 8,646,358 8,348,133
========== ===========
Frequency Electronics, Inc. and Subsidiaries
Condensed Consolidated Balance Sheets
July 31, April 30,
2004 2004
----- ----
(in thousands)
ASSETS
Cash & Marketable Securities $ 32,301 $ 31,389
Accounts Receivable 14,099 15,036
Inventories 21,394 21,925
Other Current Assets 4,196 4,485
Property, Plant & Equipment 11,227 11,486
Other Assets 7,917 8,339
---------- ----------
$ 91,134 $ 92,660
========== ===========
LIABILITIES AND STOCKHOLDERS'
EQUITY
Current Liabilities $ 8,338 $ 11,827
Long-term Obligations and Other 17,480 17,657
Stockholders' Equity 65,316 63,176
---------- ----------
$ 91,134 $ 92,660
========== ===========
CONTACT: Frequency Electronics, Inc.
General Joseph P. Franklin, 516/794-4500
www.frequencyelectronics.com
SOURCE: Frequency Electronics, Inc.