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Document and Entity Information - USD ($)	12 Months Ended
Document and Entity Information - USD ($)	Apr. 30, 2012	Jul. 23, 2012	Oct. 31, 2011
Document Information [Line Items]
Document Type	10-K
Amendment Flag	false
Document Period End Date	Apr. 30, 2012
Document Fiscal Year Focus	2012
Document Fiscal Period Focus	FY
Trading Symbol	FEIM
Entity Registrant Name	FREQUENCY ELECTRONICS INC
Entity Central Index Key	0000039020
Current Fiscal Year End Date	--04-30
Entity Well-known Seasoned Issuer	No
Entity Current Reporting Status	Yes
Entity Voluntary Filers	No
Entity Filer Category	Smaller Reporting Company
Entity Common Stock, Shares Outstanding		8,383,734
Entity Public Float			$ 46,700,000

Consolidated Balance Sheets - USD ($) $ in Thousands	Apr. 30, 2012	Apr. 30, 2011
Current assets:
Cash and cash equivalents	$ 4,782	$ 5,275
Marketable securities	17,658	15,357
Accounts receivable, net of allowance for doubtful accounts of $400 in 2012 and $258 in 2011	10,866	11,663
Costs and estimated earnings in excess of billings, net	7,207	2,409
Inventories, net	34,299	28,172
Deferred income taxes	3,152	2,580
Prepaid income taxes		882
Prepaid expenses and other	1,398	1,398
Total current assets	79,362	67,736
Property, plant and equipment, at cost, net of accumulated depreciation and amortization	8,374	7,163
Deferred income taxes	5,692	750
Goodwill and other intangible assets	873	218
Cash surrender value of life insurance and cash held in trust	10,133	9,409
Investment in and loans receivable from affiliates	809	3,738
Other assets	984	817
Total assets	106,227	89,831
Current liabilities:
Short-term credit obligations	6,383	275
Accounts payable - trade	2,644	1,654
Accrued liabilities	6,986	5,457
Income taxes payable	96
Total current liabilities	16,109	7,386
Capital lease obligation- noncurrent	15	181
Deferred compensation	10,179	9,827
Deferred rent and other liabilities	792	902
Total liabilities	27,095	18,296
Commitments and contingencies
Stockholders' equity:
Preferred stock - authorized 600,000 shares of $1.00 par value; no shares issued
Common stock - authorized 20,000,000 shares of $1.00 par value; issued - 9,163,940 shares	9,164	9,164
Additional paid-in capital	50,797	49,868
Retained earnings	18,660	11,286
Stockholders' Equity before Treasury Stock, Total	78,621	70,318
Common stock reacquired and held in treasury - at cost (800,787 shares in 2012 and 865,734 shares in 2011)	(3,659)	(3,975)
Accumulated other comprehensive income	4,170	5,192
Total stockholders' equity	79,132	71,535
Total liabilities and stockholders' equity	$ 106,227	$ 89,831

Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands	Apr. 30, 2012	Apr. 30, 2011
Accounts receivable, allowance for doubtful accounts	$ 400	$ 258
Preferred stock, authorized	600,000	600,000
Preferred stock, par value	$ 1.00	$ 1.00
Preferred stock, shares issued
Common stock, authorized	20,000,000	20,000,000
Common stock, par value	$ 1.00	$ 1.00
Common stock, issued	9,163,940	9,163,940
Common stock reacquired and held in treasury, shares	800,787	865,734

Consolidated Statements of Income - USD ($) $ in Thousands	12 Months Ended
Consolidated Statements of Income - USD ($) $ in Thousands	Apr. 30, 2012	Apr. 30, 2011
Revenues	$ 63,595	$ 53,223
Cost of revenues	38,977	33,254
Gross margin	24,618	19,969
Selling and administrative expenses	14,055	11,398
Research and development expenses	3,860	5,081
Operating profit	6,703	3,490
Other income (expense):
Investment income	646	395
Gain on investment in affiliate	730
Equity loss	(650)	(68)
Impairment of investment in affiliate	(350)
Interest expense	(121)	(118)
Other expense, net	(144)	(104)
Income before benefit for income taxes	6,814	3,595
Benefit for income taxes	(560)	(2,420)
Net income	$ 7,374	$ 6,015
Net income per common share:
Basic	$ 0.89	$ 0.73
Diluted	$ 0.86	$ 0.72
Average shares outstanding:
Basic	8,329,081	8,258,989
Diluted	8,540,955	8,363,023

Consolidated Statements of Cash Flows - USD ($) $ in Thousands	12 Months Ended
	Apr. 30, 2012	Apr. 30, 2011
Cash flows from operating activities:
Net income	$ 7,374	$ 6,015
Adjustments to reconcile net income to net cash provided in operating activities:
Deferred income tax benefit	(3,100)	(3,550)
Depreciation and amortization	2,241	1,937
Deferred lease obligation	(69)	13
Provision for losses on accounts receivable, inventories and warranty reserve	1,463	1,129
(Gain) Loss on marketable securities and other assets, net	(69)	73
Gain on investment in affiliate	(730)
Equity loss	650	68
Impairment of investment in affiliate	350
Employee benefit plans expense	1,156	1,052
Stock-based compensation expense	862	476
Tax benefit from exercise of stock-based compensation	(9)	(39)
Changes in operating assets and liabilities:
Accounts receivable	(4,522)	(1,606)
Inventories	(4,242)	(1,748)
Prepaid expenses and other	(102)	(95)
Other assets	(567)	(398)
Accounts payable - trade	880	(534)
Accrued liabilities	(29)	318
Income taxes refundable/payable	1,114	(975)
Other liabilities	(507)	(257)
Net cash provided by operating activities	2,144	1,879
Cash flows from investing activities:
Acquisition of FEI-Elcom, net of $763 cash acquired	(4,483)
Purchase of marketable securities	(8,782)	(8,771)
Proceeds from sale or redemption of marketable securities	6,636	4,000
Proceeds from sale of fixed assets	24
Capital expenditures	(1,396)	(1,953)
Net cash used in investing activities	(8,001)	(6,724)
Cash flows from financing activities:
Proceeds from credit line borrowing	6,344
Payment of short-term credit and lease obligations	(660)	(258)
Proceeds from exercise of stock options and stock appreciation rights	13	70
Tax benefit from exercise of stock-based compensation	9	39
Net cash provided by (used in) financing activities	5,706	(149)
Net decrease in cash and cash equivalents before effect of exchange rate changes	(151)	(4,994)
Effect of exchange rate changes on cash and cash equivalents	(342)	315
Net decrease in cash and cash equivalents	(493)	(4,679)
Cash and cash equivalents at beginning of year	5,275	9,954
Cash and cash equivalents at end of year	4,782	5,275
Cash paid during the year for:
Interest	119	114
Income taxes	1,475	$ 2,255
Allocation of fair value to net assets acquired on purchase of FEI-Elcom Tech, Inc.
Cash	763
Accounts receivable	342
Inventory	3,233
Other current assets	61
Fixed assets	2,100
Goodwill and other intangible assets	673
Deferred tax assets	2,573
Other assets	180
Accounts payable	(350)
Accrued expenses	(1,461)
Capital lease obligations	(234)
Business Acquisition, Purchase Price Allocation, Assets Acquired (Liabilities Assumed), Net	$ 7,880

Consolidated Statements of Cash Flows (Parenthetical) $ in Thousands	12 Months Ended
	Apr. 30, 2012 USD ($)
Acquisition of FEI-Elcom, cash acquired	$ 763

Consolidated Statements of Changes in Stockholders' Equity - USD ($) $ in Thousands	Total	Common Stock	Additional paid in capital	Retained earnings	Treasury stock	Accumulated other comprehensive income (loss)
Beginning Balance (in shares) at Apr. 30, 2010		9,163,940			946,172
Beginning Balance at Apr. 30, 2010	$ 63,383	$ 9,164	$ 49,580	$ 5,271	$ (4,651)	$ 4,019
Contribution of stock to 401(k) plan	379		(139)		$ 518
Contribution of stock to 401(k) plan (in shares)					(58,637)
Stock-based compensation expense	476		476
Tax benefit from stock option exercise	39		39
Exercise of stock options and stock appreciation rights	70		(88)		$ 158
Exercise of stock options and stock appreciation rights (in shares)					(21,801)
Comprehensive Income:
Change in unrealized gains and losses on marketable securities	238					238
Foreign currency translation adjustment	935					935
Net Income	6,015			6,015
Comprehensive income	7,188
Ending Balance (in shares) at Apr. 30, 2011		9,163,940			865,734
Ending Balance at Apr. 30, 2011	71,535	$ 9,164	49,868	11,286	$ (3,975)	5,192
Contribution of stock to 401(k) plan	360		154		$ 206
Contribution of stock to 401(k) plan (in shares)					(42,370)
Stock-based compensation expense	862		775		$ 87
Stock-based compensation expense (in shares)					(17,900)
Tax benefit from stock option exercise	9		9
Exercise of stock options and stock appreciation rights	14		(9)		$ 23
Exercise of stock options and stock appreciation rights (in shares)					(4,677)
Comprehensive Income:
Change in unrealized gains and losses on marketable securities	48					48
Foreign currency translation adjustment	(1,070)					(1,070)
Net Income	7,374			7,374
Comprehensive income	6,352
Ending Balance (in shares) at Apr. 30, 2012		9,163,940			800,787
Ending Balance at Apr. 30, 2012	$ 79,132	$ 9,164	$ 50,797	$ 18,660	$ (3,659)	$ 4,170

Summary of Accounting Policies

12 Months Ended

Apr. 30, 2012

Summary of Accounting Policies

1. Summary of Accounting Policies

Principles of Consolidation:

The consolidated financial statements include the accounts of Frequency Electronics, Inc. and its wholly-owned subsidiaries (the "Company" or "Registrant"). References to “FEI” are to the parent company alone and do not refer to any of its subsidiaries. The Company is principally engaged in the design, development and manufacture of precision time and frequency control products and components for microwave integrated circuit applications. See Note 15 for information regarding the Company’s FEI-NY (which includes the subsidiaries FEI Government Systems, Inc., FEI Communications, Inc., Frequency Electronics, Inc. Asia (“FEI-Asia”) and FEI-Elcom Tech, Inc. (“FEI-Elcom”)), Gillam-FEI, and FEI-Zyfer business segments. Intercompany accounts and significant intercompany transactions are eliminated in consolidation. To accommodate the different fiscal periods of Gillam-FEI, the Company recognizes its share of net income or loss on a one month lag. Any material events which may occur during the intervening month at Gillam-FEI will be accounted for in the consolidated financial statements.

These financial statements have been prepared in conformity with United States generally accepted accounting principles and require management to make estimates and assumptions that affect amounts reported and disclosed in the financial statements and related notes. Actual results could differ from these estimates.

Cash Equivalents:

The Company considers certificates of deposit and other highly liquid investments with maturities of three months or less when purchased to be cash equivalents. The Company places its temporary cash investments with high credit quality financial institutions. Such investments may be in excess of the FDIC insurance limit. No losses have been experienced on such investments.

Marketable Securities:

Marketable securities consist of investments in common stocks, including exchange-traded funds, corporate debt securities and debt securities of U.S. government agencies. All marketable securities were held in the custody of financial institutions; five institutions at April 30, 2012 and four at April 30, 2011. Investments in debt and equity securities are categorized as available for sale and are carried at fair value, with unrealized gains and losses excluded from income and recorded directly to stockholders' equity. The Company recognizes gains or losses when securities are sold using the specific identification method.

Allowance for Doubtful Accounts:

Losses from uncollectible accounts receivable are provided for by utilizing the allowance for doubtful accounts method based upon management’s estimate of uncollectible accounts. Management analyzes accounts receivable and the potential for bad debts, customer concentrations, credit worthiness, current economic trends and changes in customer payment terms when evaluating the amount recorded for the allowance for doubtful accounts.

Inventories:

Inventories, which consist of finished goods, work-in-process, raw materials and components, are accounted for at the lower of cost (specific and average) or market.

Property, Plant and Equipment:

Property, plant and equipment are recorded at cost and include interest on funds borrowed to finance construction. Expenditures for renewals and betterments are capitalized; maintenance and repairs are charged to income when incurred. When fixed assets are sold or retired, the cost and related accumulated depreciation and amortization are eliminated from the respective accounts and any gain or loss is credited or charged to income.

If events or changes in circumstances indicate that the carrying amount of a long-lived asset may not be recoverable, the Company estimates the future cash flows expected to result from the use of the asset and its eventual disposition. If the sum of the expected future cash flows (undiscounted and without interest charges) is less than the carrying amount of the long-lived asset, an impairment loss is recognized. To date, no impairment losses have been recognized.

Depreciation and Amortization:

Depreciation of fixed assets is computed on the straight-line method based upon the estimated useful lives of the assets (40 years for buildings and 3 to 10 years for other depreciable assets). Leasehold improvements and equipment acquired under capital leases are amortized on the straight-line method over the shorter of the term of the lease or the useful life of the related asset.

Amortization of identifiable intangible assets is based upon the expected lives of the assets and is recorded at a rate which approximates the Company’s utilization of the assets.

Intangible Assets:

Intangible assets consist of the ISO 9000 certification arising from the acquisition of FEI-Elcom in the assignment of fair value to its acquired assets including intangibles. The certification is valued at fair value and amortized over the estimated useful life of 3 years from the date of acquisition.

Goodwill:

The Company records goodwill as the excess of purchase price over the fair value of identifiable net assets acquired. Goodwill is tested for impairment on at least an annual basis at year end. When it is determined that the carrying value of goodwill may not be recoverable, the Company writes down the goodwill to an amount commensurate with the revised value of the acquired assets. The Company measures impairment based on revenue projections, recent transactions involving similar businesses and price/revenue multiples at which they were bought and sold, price/revenue multiples of competitors, and the present market value of publicly-traded companies in the Company’s industry.

Revenue and Cost Recognition:

Revenues under larger, long-term contracts, which generally require billings based on achievement of milestones rather than delivery of product, are reported in operating results using the percentage of completion method. For U.S. Government and other fixed-price contracts that require initial design and development of the product, revenue is recognized on the cost-to-cost method. Under this method, revenue is recorded based upon the ratio that incurred costs bear to total estimated contract costs with related cost of sales recorded as the costs are incurred. Costs and estimated earnings in excess of billings on uncompleted contracts, net of billings on uncompleted contracts in excess of costs and estimated earnings, are included in current assets.

On production-type orders, revenue is recorded as units are delivered with the related cost of sales recognized on each shipment based upon a percentage of estimated final program costs.

Changes in job performance on long-term and production-type orders may result in revisions to costs and revenue and are recognized in the period in which revisions are determined to be required. Provisions for anticipated losses are made in the period in which they become determinable.

For customer orders in the Company’s subsidiaries, and smaller contracts or orders in the other business segments, sales of products and services to customers are reported in operating results upon shipment of the product or performance of the services pursuant to terms of the customer order.

Contract costs include all direct material, direct labor costs, manufacturing overhead and other direct costs related to contract performance. Selling, general and administrative costs are charged to expense as incurred.

In accordance with industry practice, inventoried costs contain amounts relating to contracts and programs with long production cycles, a portion of which will not be realized within one year.

Comprehensive Income:

Comprehensive income consists of net income and other comprehensive income. Other comprehensive income includes changes in unrealized gains or losses, net of tax, on securities available for sale during the year and the effects of foreign currency translation adjustments.

Research and Development expenses:

The Company engages in research and development activities to identify new applications for its core technologies, to improve existing products and to improve manufacturing processes to achieve cost reductions and manufacturing efficiencies. Research and development costs include direct labor, manufacturing overhead, direct materials and contracted services. Such costs are expensed as incurred.

Income Taxes:

The Company recognizes deferred tax liabilities and assets based on the expected future tax consequences of events that have been included in the financial statements or tax returns. Under this method, deferred tax liabilities and assets are determined based on the difference between the financial statement and tax bases of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. Valuation allowances are established and adjusted when necessary to increase or reduce deferred tax assets to the amount expected to be realized.

The Company analyzes its tax positions under accounting standards which prescribe recognition thresholds that must be met before a tax benefit is recognized in the financial statements and provides guidance on de-recognition, classification, interest and penalties, accounting in interim periods, disclosure, and transition. An entity may only recognize or continue to recognize tax positions that meet a "more likely than not" threshold. When and if the Company were to recognize interest or penalties related to unrecognized tax benefits, it would be reported net of the federal tax benefit in the tax provision.

Earnings Per Share:

Basic earnings per share are computed by dividing net earnings by the weighted average number of shares of common stock outstanding. Diluted earnings per share are computed by dividing net earnings by the sum of the weighted average number of shares of common stock and the if-converted effect of unexercised stock options.

Fair Values of Financial Instruments:

Cash and cash equivalents and short-term credit obligations are reflected in the accompanying consolidated balance sheets at amounts considered by management to reasonably approximate fair value based upon the nature of the instrument and current market conditions. Management is not aware of any factors that would significantly affect the value of these amounts. The Company also has a minority interest in a privately-held company, Morion, Inc. (“Morion”). The Company is unable to reasonably estimate a fair value for this investment. Additionally, the Company had a minority interest in Elcom Technologies, Inc. (“Elcom” and, after the acquisition, “FEI-Elcom”) in 2012 (through the date of acquisition) and fiscal year 2011. (see Note 11).

Foreign Operations and Foreign Currency Adjustments:

The Company maintains manufacturing operations in Belgium and the People’s Republic of China. The Company is vulnerable to currency risks in these countries. The local currency is the functional currency of each of the Company’s non-U.S. subsidiaries. No foreign currency gains or losses are recorded on intercompany transactions since they are effected at current rates of exchange. The results of operations of foreign subsidiaries, when translated into U.S.dollars, reflect the average rates of exchange for the periods presented. The balance sheets of foreign subsidiaries, except for equity accounts which are translated at historical rates, are translated into U.S.dollars at the rates of exchange in effect on the date of the balance sheet. As a result, similar results in local currency can vary upon translation into U.S.dollars if exchange rates fluctuate significantly from one period to the next.

Equity-based Compensation:

The Company values its share-based payment transactions using the Black-Scholes valuation model. Such value is recognized as expense on a straight-line basis over the service period of the awards, which is generally the vesting period, net of estimated forfeitures.

The weighted average fair value of each option or stock appreciation right has been estimated on the date of grant using the Black-Scholes option pricing model with the following range of weighted average assumptions used for grants:

	Years ended April 30
	2012	2011
Expected volatility	40%	38.5% to 39.3%
Dividend yield	0.0%	0.0%
Risk-free interest rate	1.30% to 1.34%	1.82% to 3.07%
Expected lives	10 years	10 years

The expected life assumption was determined based on the Company’s historical experience. The expected volatility assumption was based on the historical volatility of the Company’s common stock. The dividend yield assumption was determined based upon the Company’s past history of dividend payments and the Company’s current decision to suspend payment of dividends. The risk-free interest rate assumption was determined using the implied yield currently available for zero-coupon U.S. government issues with a remaining term equal to the expected life of the stock options.

Concentration of Credit Risk

Financial instruments, which potentially subject the Company to concentration of credit risk, consist principally of cash and cash equivalents and trade receivables. The Company maintains accounts at several commercial banks at which the balances exceed Federal Deposit Insurance Corporation limits. The Company has not experienced any losses on such amounts. Concentration of credit risk with respect to trade receivables is generally diversified due to the large number of entities comprising the Company’s customer base and their dispersion across geographic areas principally within the United States. The Company routinely addresses the financial strength of its customers and, as a consequence, believes that its receivable credit risk exposure is limited. The Company does not require customers to post collateral.

New Accounting Pronouncements:

In June 2011, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2011-05 “Comprehensive Income (Topic 220): Presentation of Comprehensive Income” (“ASU No. 2011-05”). Under ASU No. 2011-5, an entity has the option to present the total of comprehensive income, the components of net income, and the components of other comprehensive income either in a single continuous statement of comprehensive income or in two separate but consecutive statements. Regardless of which option is selected, an entity is required to present each component of net income along with total net income, each component of other comprehensive income along with a total for other comprehensive income, and a total amount for comprehensive income. ASU No. 2011-5 eliminates the option (currently utilized by the Company) to present the components of other comprehensive income as part of the statement of changes in stockholders’ equity. ASU No. 2011-5 is effective for fiscal years, and interim periods within those years, beginning after December 15, 2011, and affects only the presentation of financial statements and thus will have no financial impact on the Company’s Consolidated Financial Statements. In December 2011, the FASB deferred those changes in ASU No. 2011-5 that relate to the presentation of reclassification adjustments.

Earnings Per Share

12 Months Ended

Apr. 30, 2012

Earnings Per Share

2. Earnings Per Share

Reconciliations of the weighted average shares outstanding for basic and diluted Earnings Per Share are as follows:

	Years ended April 30,
	2012		2011
Basic EPS Shares outstanding (weighted average)		8,329,081		8,258,989
Effect of Dilutive Securities		211,874		104,034
Diluted EPS Shares outstanding		8,540,955		8,363,023

Dilutive securities consist of unexercised stock options and stock appreciation rights (“SARS”). The computation of diluted shares outstanding excludes those options and SARS with an exercise price in excess of the average market price of the Company’s common shares during the periods presented. The inclusion of such options and SARS in the computation of earnings per share would have been antidilutive. For the years ended April 30, 2012 and 2011, the number of excluded options and SARS were 733,375 and 943,275, respectively.

Costs and Estimated Earnings in Excess of Billings

12 Months Ended

Apr. 30, 2012

Costs and Estimated Earnings in Excess of Billings

3. Costs and Estimated Earnings in Excess of Billings

At April 30, 2012 and 2011, costs and estimated earnings in excess of billings, net, consist of the following:

	2012			2011
	(in thousands)
Costs and estimated earnings in excess of billings	$	9,552		$	3,711
Billings in excess of costs and estimated earnings		(2,345	)		(1,302	)
Net asset	$	7,207		$	2,409

Such amounts represent revenue recognized on long-term contracts that had not been billed at the balance sheet dates or represent a liability for amounts billed in excess of the revenue recognized. Amounts are billed to customers pursuant to contract terms. In general, the recorded amounts will be billed and collected or revenue recognized within twelve months of the balance sheet date. Revenue on these long-term contracts is accounted for on the percentage of completion basis. During the years ended April 30, 2012 and 2011, revenue recognized under percentage of completion contracts was approximately $36.1 million and $22.4 million, respectively.

Inventories

12 Months Ended

Apr. 30, 2012

Inventories

4. Inventories

Inventories at April 30, 2012 and 2011, respectively, consisted of the following (in thousands):

	2012		2011
Raw Materials and Component Parts	$	15,813	$	13,477
Work in Progress		15,762		11,921
Finished Goods		2,724		2,774
	$	34,299	$	28,172

As of April 30, 2012 and 2011, approximately $25.5 million and $19.7 million, respectively, of total inventory is located in the United States, approximately $8.2 million and $7.8 million, respectively, is located in Belgium and approximately $0.6 million and $0.7 million, respectively, is located in China.

Marketable Securities

12 Months Ended

Apr. 30, 2012

Marketable Securities

5. Marketable Securities

The cost, gross unrealized gains, gross unrealized losses and fair market value of available-for-sale securities at April 30, 2012 and 2011 are as follows (in thousands):

	April 30, 2012
			Gross		Gross			Fair
			Unrealized		Unrealized			Market
	Cost		Gains		Losses			Value
Fixed income securities	$	11,573	$	297	$	(6	)	$	11,864
Equity securities		5,411		552		(169	)		5,794
	$	16,984	$	849	$	(175	)	$	17,658

	April 30, 2011
			Gross		Gross			Fair
			Unrealized		Unrealized			Market
	Cost		Gains		Losses			Value
Fixed income securities	$	11,741	$	256	$	(2	)	$	11,995
Equity securities		3,016		346		-			3,362
	$	14,757	$	602	$	(2	)	$	15,357

The following table presents the fair value and unrealized losses, aggregated by investment type and length of time that individual securities have been in a continuous unrealized loss position:

	Less than 12 months					12 Months or more				Total
	Fair		Unrealized			Fair		Unrealized		Fair		Unrealized
	Value		Losses			Value		Losses		Value		Losses
April 30, 2012
Fixed Income Securities	$	301	$	(6	)	$	-	$	-	$	301	$	(6	)
Equity Securities		539		(169	)		-		-		539		(169	)
	$	840	$	(175	)	$	-	$	-	$	840	$	(175	)
April 30, 2011
Fixed Income Securities	$	1,426	$	(2	)	$	-	$	-	$	1,426	$	(2	)
Equity Securities		-		-			-		-		-		-
	$	1,426	$	(2	)	$	-	$	-	$	1,426	$	(2	)

The Company regularly reviews its investment portfolio to identify and evaluate investments that have indications of possible impairment. The Company does not believe that its investments in marketable securities with unrealized losses at April 30, 2012 are other-than-temporary due to market volatility of the security’s fair value, analysts’ expectations and the Company’s ability to hold the securities for a period of time sufficient to allow for any anticipated recoveries in market value.

Proceeds from the sale or redemption of available-for-sale securities and the resulting gross realized gains and losses included in the determination of net income (loss) are as follows (in thousands):

	For the years ended April 30,
	2012		2011
Proceeds	$	6,636	$	4,000
Gross realized gains	$	20	$	-
Gross realized losses	$	-	$	(48	)

Maturities of fixed income securities classified as available-for-sale at April 30, 2012 are as follows (at cost, in thousands):

Current	$	2,001
Due after one year through five years		8,704
Due after five years through ten years		868
	$	11,573

The fair value accounting framework provides a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (level 1 measurements) and the lowest priority to unobservable inputs (level 3 measurements).

The three levels of the fair value hierarchy are described below:

Level 1

Inputs to the valuation methodology are unadjusted quoted prices for identical assets or liabilities in active markets that the Company has the ability to access.

Level 2

Inputs to the valuation methodology include:

Quoted prices for similar assets or liabilities in active markets;

Quoted prices for identical or similar assets or liabilities in inactive markets

Inputs other than quoted prices that are observable for the asset or liability;

Inputs that are derived principally from or corroborated by observable market data by correlation or other means.

Level 3

Inputs to the valuation methodology are unobservable and significant to the fair value measurement.

The asset’s or liability’s fair value measurement level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement. Valuation techniques used need to maximize the use of observable inputs and minimize the use of unobservable inputs. All of the Company’s investments in marketable securities are Level 1 assets.

Property, Plant and Equipment

12 Months Ended

Apr. 30, 2012

Property, Plant and Equipment

6. Property, Plant and Equipment

Property, plant and equipment at April 30, 2012 and 2011, consists of the following (in thousands):

	2012		2011
Buildings and building improvements	$	5,500	$	4,896
Machinery, equipment and furniture		42,850		40,498
		48,350		45,394
Less, accumulated depreciation		39,976		38,231
	$	8,374	$	7,163

Depreciation expense for the years ended April 30, 2012 and 2011 was $2,222,000 and $1,937,000 respectively.

Maintenance and repairs charged to operations for the years ended April 30, 2012 and 2011 was approximately $807,000 and $701,000, respectively.

During fiscal year 2009, the Company renewed the lease for its Long Island, New York headquarters building for a 5-year period at an annual rental of $600,000. The lease will end in January 2014 unless the Company exercises its option to continue the lease for a second 5-year renewal period with annual rental of $800,000. Under the terms of the lease, the Company is required to pay its proportional share of real estate taxes, insurance and other charges.

In addition, the Company’s subsidiaries in New Jersey, China, France and California lease their office and manufacturing facilities. FEI-Elcom leases 32,000 square feet of office and manufacturing space at current monthly rental of approximately $27,000, increasing to $28,000 in the last two years of the lease which expires in March 2016. The lease for the FEI-Asia facility is for a one-year term with monthly rent of $6,100 through February 2013. FEI-Zyfer leases office and manufacturing space encompassing 27,850 square feet. Monthly rental payments are currently $27,800 and increase each year over the remaining 64 months of the lease term. Satel-FEI, a wholly-owned subsidiary of Gillam-FEI, occupies office space under a 9-year lease, cancelable after three years, at an approximate rate of $1,100 per month.

Rent expense under operating leases for the fiscal years ended April 30, 2012 and 2011 was approximately $1.0 million each year. The Company records rent expense on its New York building and FEI-Zyfer facility on the straightline method over the lives of the respective leases. As a result, as of April 30, 2012 and 2011, the Company’s balance sheet includes deferred rent of approximately $338,000 and $408,000, respectively, which will be amortized over the respective rental periods.

In fiscal year 2008, the Company acquired manufacturing equipment of approximately $1.2 million, which were financed by capital leases. At the end of the lease terms, the Company may retain the equipment for a nominal charge. In addition, included in the assets of FEI-Elcom is machinery and equipment with a value of approximately $300,000 obtained under capital leases prior to the Company’s acquisition of FEI-Elcom. (See Note 11. Acquisition of Elcom Technologies, Inc.) FEI-Elcom’s remaining capital lease obligation at the date of acquisition was approximately $234,000.

Future minimum lease payments required by the leases are as follows (in thousands):

Years ending
April 30,	Operating Leases		Capital Lease
2013	$	1,335	$	371
2014		1,029		16
2015		704		-
2016		673		-
2017		374		-
Thereafter		125		-
Less amounts representing interest		-		(14	)
Present value of future minimum lease payments	$	4,240	$	373

Less: Current portion				358

Long-term portion, lease obligation			$	15

- Definition

The entire disclosure for long-lived, physical assets that are used in the normal conduct of business to produce goods and services and not intended for resale. Examples include land, buildings, machinery and equipment, and other types of furniture and equipment including, but not limited to, office equipment, furniture and fixtures, and computer equipment and software. This disclosure may include property plant and equipment accounting policies and methodology, a schedule of property, plant and equipment gross, additions, deletions, transfers and other changes, depreciation, depletion and amortization expense, net, accumulated depreciation, depletion and amortization expense and useful lives, income statement disclosures, assets held for sale and public utility disclosures.

+ References + Details

Short-Term Debt Obligations

12 Months Ended

Apr. 30, 2012

Short-Term Debt Obligations

The Company has a $9.3 million line of credit with the financial institution which also manages a substantial portion of its investment in marketable securities. If the balance of the investments decreases (through liquidation or through changes in value), the availability under the line of credit will also decrease. The line is secured by the investments and has no maturity date so long as the Company maintains its investments with the financial institution. During fiscal year 2012, the Company borrowed $6.0 million to fund the acquisition of FEI-Elcom (See Note 11) rather than liquidate any portion of its investment portfolio. During fiscal year 2012, advances against the line of credit bore interest at variable interest rates between 1.74% and 1.80%.

The Company’s European subsidiaries have available approximately 1.9 million Euros (approximately $2.5 million based on current rates of exchange between the dollar and the Euro) in bank credit lines to meet short-term cash flow requirements. As of April 30, 2012, no amount was outstanding under such lines of credit. Borrowings under the bank credit lines, if any, must be repaid within one year of receipt of funds. Interest on these credit lines varies from 0.5% to 1.5% over the EURO Interbank Offered rate (EURIBOR). At April 30, 2012 and 2011, the rate was 1.244% and 0.411%, respectively, based on the 1 month EURIBOR.

Accrued Liabilities

12 Months Ended

Apr. 30, 2012

Accrued Liabilities

Accrued liabilities at April 30, 2012 and 2011 consist of the following (in thousands):

	2012		2011
Vacation and other compensation	$	1,712	$	1,103
Incentive compensation		1,799		745
Payroll taxes		1,485		1,761
Advances from customers		137		554
Warranty reserve		778		145
Other		1,075		1,149
	$	6,986	$	5,457

Investment in Morion, Inc.

12 Months Ended

Apr. 30, 2012

Investment in Morion, Inc.

9. Investment in Morion, Inc.

The Company has an investment in Morion, Inc., a privately-held Russian company, which manufactures high precision quartz resonators and crystal oscillators. The Company’s investment consists of 4.6% of Morion’s outstanding shares, accordingly, the Company accounts for its investment in Morion on the cost basis. This investment is included in investment in and loans receivable from affiliates in the accompanying balance sheets.

During the fiscal years ended April 30, 2012 and 2011, the Company acquired product from Morion in the aggregate amount of approximately $224,000 and $151,000, respectively, and the Company sold product to Morion in the aggregate amount of approximately $1,162,000 and $309,000, respectively. At April 30, 2012, accounts receivable included $131,000 due from Morion and no amounts were payable to Morion.

Goodwill and Other Intangible Assets

12 Months Ended

Apr. 30, 2012

Goodwill and Other Intangible Assets

10. Goodwill and Other Intangible Assets

During fiscal year 2004, the Company acquired FEI-Zyfer, Inc. (“FEI-Zyfer”). This acquisition resulted in the recording of $218,000 in goodwill. In February 2012, the Company acquired FEI-Elcom (see Note 11 Acquisition of Elcom Technologies, Inc.) resulting in the recording of goodwill in the amount of $398,000 plus other intangible assets with a value of $275,000. Management has determined that goodwill is not impaired as of April 30, 2012 and 2011. The other intangible asset will be amortized over a 3-year period from the date of acquisition or approximately $92,000 per year. Amortization expense for the year ended April 30, 2012 was approximately $19,000.

- Definition

The entire disclosure for the aggregate amount of goodwill and a description of intangible assets, which may include (a) for amortizable intangible assets (also referred to as finite-lived intangible assets), the carrying amount, the amount of any significant residual value, and the weighted-average amortization period, (b) for intangible assets not subject to amortization (also referred to as indefinite-lived intangible assets), the carrying amount, and (c) the amount of research and development assets acquired and written off in the period, including the line item in the income statement in which the amounts written off are aggregated, if not readily apparent from the income statement. Also discloses (a) for amortizable intangibles assets in total and by major class, the gross carrying amount and accumulated amortization, the total amortization expense for the period, and the estimated aggregate amortization expense for each of the five succeeding fiscal years, (b) for intangible assets not subject to amortization the carrying amount in total and by major class, and (c) for goodwill, in total and for each reportable segment, the changes in the carrying amount of goodwill during the period (including the aggregate amount of goodwill acquired, the aggregate amount of impairment losses recognized, and the amount of goodwill included in the gain (loss) on disposal of a reporting unit). If any part of goodwill has not been allocated to a reportable segment, discloses the unallocated amount and the reasons for not allocating. For each impairment loss recognized related to an intangible asset (excluding goodwill), discloses: (a) a description of the impaired intangible asset and the facts and circumstances leading to the impairment, (b) the amount of the impairment loss and the method for determining fair value, (c) the caption in the income statement or the statement of activities in which the impairment loss is aggregated, and (d) the segment in which the impaired intangible asset is reported. For each goodwill impairment loss recognized, discloses: (a) a description of the facts and circumstances leading to the impairment, (b) the amount of the impairment loss and the method of determining the fair value of the associated reporting unit, and (c) if a recognized impairment loss is an estimate not finalized and the reasons why the estimate is not final. May also disclose the nature and amount of any significant adjustments made to a previous estimate of an impairment loss.

+ References + Details

Acquisition of Elcom Technologies, Inc.

12 Months Ended

Apr. 30, 2012

Acquisition of Elcom Technologies, Inc.

11. Acquisition of Elcom Technologies, Inc.

On February 21, 2012, the Company purchased 74.88% of the capital stock of Elcom. Prior to the acquisition, the Company had a minority ownership interest of 25.12% of the capital stock of Elcom. After the acquisition, the Company owned 100% and changed the subsidiary’s name to FEI-Elcom Tech, Inc. The Company acquired Elcom as, in addition to its own product line, Elcom provides design and technical support for the Company’s satellite business, which accounts for a significant amount of the Company’s consolidated revenue. For the acquisition, the Company paid approximately $4.1 million to the shareholders for their shares of common stock and an additional $910,000 to certain selling shareholders to settle their outstanding debt with Elcom. In addition the Company had notes due from Elcom with a book value of approximately $1.7 million which was forgiven as an additional investment in Elcom. Based on the amounts paid to the Elcom shareholders, the Company determined that the fair value of Elcom at the date of acquisition was approximately $7.9 million. The Company’s determination of the fair value of Elcom at the date of acquisition included an adjustment for a control premium of 15% based on the total value at the date of acquisition.

The fair value of Elcom at the date of the transaction was allocated to $4.6 million of net tangible assets, deferred taxes of $2.6 million, and approximately $700,000 of intangible assets, including goodwill of approximately $400,000. None of the goodwill is expected to be deductible for income tax purposes.

The FEI-Elcom transaction is considered a “step acquisition” by generally accepted accounting principles. Such an acquisition required the Company to remeasure its previously held equity interest in Elcom and adjust it to fair value. The difference between the fair value of the Company’s ownership in Elcom and the Company’s carrying value of its investment resulted in the recognition of a gain of approximately $730,000.

Prior to the acquisition of Elcom, the Company recorded its share of Elcom’s income or loss on the equity method. In addition, periodically the Company measured the market value of Elcom based on comparisons to comparable companies as well as Elcom’s forecasts of future financial results. For the year ended April 30, 2012, in addition to its equity share in the income or loss of Elcom during the year, the Company determined that its investment was impaired and recorded impairment charges in the amount $350,000. No impairment charges were recorded during the year ended April 30, 2011.

During the fiscal years ended April 30, 2012 and 2011, prior to the acquisition of Elcom, the Company acquired technical services from Elcom in the aggregate amount of approximately $16,000 and $317,000, respectively; sold product to Elcom in the amount of approximately $5,000 and $133,000, respectively; and the Company recorded interest income on notes to Elcom in the amount of approximately $87,000 and $90,000, respectively.

The estimated fair value of Elcom has been allocated as follows.

Cash	$	763
Accounts receivable		342
Inventory		3,233
Other current assets		61
Fixed assets		2,100
Goodwill and other intangible assets		673
Deferred tax assets		2,573
Other assets		180
Accounts payable		(350	)
Accrued expenses		(1,461	)
Capital lease obligations		(234	)
	$	7,880

The Company incurred approximately $230,000 in acquisition related costs applicable to the transaction during the fiscal year. These expenses are included in selling and administrative expenses in the Company’s Consolidated Statements of Income

Theaccompanying consolidated statements of income for the years ended April 30, 2012 include the results of operations of FEI-Elcom since February 21, 2012 and include revenue of $840,000 and an operating loss of $700,000. The pro forma financial information set forth below is based upon the Company’s historical consolidated statements of income for the years ended April 30, 2012 and 2011, adjusted to give effect to the acquisition of FEI-Elcom as if it had occurred at the beginning of each of the periods presented. The fiscal year 2011 financial information includes the results of operations of FEI-Elcom for the period April 1, 2010 to March 31, 2011.

The pro forma financial information is presented for informational purposes only and may not be indicative of what actual results of operations would have been had the acquisition occurred on May 1, 2011 or 2010, nor does it purport to represent the results of operations for future periods. The pro forma results of operations do not include the gain on the Company’s original investment of $730,000 or the impairment of the Company’s investment in Elcom during fiscal year 2012.

	Pro forma
	(unaudited)
	Years ended April 30,
	2012		2011
	(in thousands except per share data)
Revenues	$	70,955	$	63,348
Operating profit	$	5,147	$	3,058
Net income	$	5,863	$	5,423
Earnings per share- basic	$	0.70	$	0.66
Earnings per share- diluted	$	0.69	$	0.65

- Definition

The entire disclosure for a business combination (or series of individually immaterial business combinations) completed during the period, including background, timing, and recognized assets and liabilities. The disclosure may include leverage buyout transactions (as applicable).

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Emerging Issues Task Force (EITF)
-Number 88-16
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 2: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 141
-Paragraph 51, 52
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 3: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 141R
-Appendix F
-Paragraph F4
-Subparagraph e

Reference 4: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 141R
-Paragraph 67-73
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

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-Publisher FASB
-Name Accounting Standards Codification
-Topic 805
-SubTopic 30
-Section 50
-Paragraph 1
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+ Details

Employee Benefit Plans

12 Months Ended

Apr. 30, 2012

Employee Benefit Plans

12. Employee Benefit Plans

Profit Sharing Plan:

The Company provides its U.S.-based employees with a profit sharing plan and trust under section 401(k) of the Internal Revenue Code. This plan allows all eligible employees to defer a portion of their income through voluntary contributions to the plan. In accordance with the provisions of the plan, the Company can make discretionary matching contributions in the form of cash or common stock. For the years ended April 30, 2012 and 2011, the Company contributed 42,370 and 58,637 shares of common stock, respectively. The approximate value of these shares at the date of contribution was $360,000 in fiscal year 2012 and $379,000 in fiscal year 2011. Contributed shares are drawn from the Company’s common stock held in treasury and are removed at the Company’s original cost of acquisition of such shares on a specific identification basis. In addition to changes in the treasury stock accounts, such transactions increased additional paid in capital by $154,000 in fiscal year 2012 and decreased that account by $139,000 in fiscal year 2011.

Income Incentive Pool:

The Company maintains incentive bonus programs for certain employees which are based on operating profits of the individual subsidiaries to which the employees are assigned. The Company also adopted a plan for the President and Chief Executive Officer of the Company, which formula is based on consolidated pre-tax profits. The Company charged approximately $1.8 million and $860,000 to selling and administrative expenses under these plans for the fiscal years ended April 30, 2012 and 2011, respectively.

Employee Stock Plans:

The Company has various stock plans, some of which have been approved by the Company’s stockholders, for key management employees, including officers and directors who are employees, certain consultants and independent members of the Board of Directors. The plans are Nonqualified Stock Options (“NQSO”) plans, Incentive Stock Option ("ISO”) plans and Stock Appreciation Rights (“SARS”). Under these plans, options or SARS are granted at the discretion of the Stock Option Committee at an exercise price not less than the fair market value of the Company's common stock on the date of grant.

Typically, options and SARS vest over a four-year period from the date of grant. The options and SARS expire ten years after the date of grant and are subject to certain restrictions on transferability of the shares obtained on exercise. As of April 30, 2012, a consultant who is the son of the Company’s president, had been granted options to purchase approximately 57,000 shares of Company stock under NQSO plans, all of which are exercisable at a weighted average exercise price of $5.60 and expires one year after the termination of the consulting agreement which has no expiration date. As of April 30, 2012, eligible employees had been granted options to purchase approximately 339,000 shares of Company stock under ISO plans, of which approximately 231,000 options with a weighted average exercise price of $10.39 are both outstanding and exercisable. During the year ended April 30, 2012, employees exercised ISOs for 2,700 shares of Company stock. As of April 30, 2012, eligible employees and directors have been granted SARS based on approximately 1,347,000 shares of Company stock, of which approximately 1,342,000 shares are outstanding and approximately 668,000 with a weighted average exercise price of $8.27 are exercisable. When the SARS become exercisable, the Company will settle the SARS by issuing to exercising recipients the number of shares of stock equal to the appreciated value of the Company’s stock between the grant date and exercise date. At the time of exercise, the quantity of shares under the SARS grant equal to the exercise value divided by the then market value of the shares will be returned to the pool of available shares for future grant under the Company’s stock plan. During the year ended April 30, 2012, employees exercised SARS representing approximately 5,300 shares of Company stock and received approximately 2,500 shares of Company stock. The approximately 2,700 share difference was returned to the pool of available shares and may be used for future grants.

The excess of the consideration received over the par value of the common stock or cost of treasury stock issued under both types of option plans is recognized as an increase in additional paid-in capital.

The following table summarizes information about stock option activity for the years ended April 30:

	Stock Options and Stock Appreciation Rights
						Weighted Average
				Weighted-		Remaining
				Average		Contractual		Aggregate
	Shares			Exercise Price		Term		Intrinsic Value
Outstanding – May 1, 2010		1,403,775		$	10.11		5.2 years
Granted		350,500			8.20
Exercised		(18,750	)		4.70
Expired or Canceled		(302,000	)		16.55
Outstanding – April 30, 2011		1,433,525		$	8.22		6.6 years
Granted		253,000			7.36
Exercised		(7,950	)		5.35
Expired or Canceled		(48,875	)		11.10
Outstanding – April 30, 2012		1,629,700		$	7.95		6.4 years	$	1,758,624
Exercisable		956,263		$	8.62		4.7 years	$	958,589
Available for future grants		227,264

As of April 30, 2012, total unrecognized compensation cost related to nonvested options and stock appreciation rights under the plans was approximately $2,227,000. These costs are expected to be recognized over a weighted average period of 3.0 years.

During the years ended April 30, 2012 and 2011, 221,969 and 175,156 shares, respectively, vested, the fair value of which was approximately $748,000 and $566,000, respectively. The weighted average grant date fair value of stock appreciation rights granted during the years ended April 30, 2012 and 2011, were approximately $3.73 and $4.39, respectively.

Stock-based compensation costs capitalized as part of work in process inventory or included in the cost of sales of programs on which the Company recognizes revenue under the percentage of completion method were approximately $363,000 and $295,000 for the years ended April 30, 2012 and 2011, respectively. Selling and administrative expenses include stock-based compensation expense of approximately $359,000 and $181,000 for the years ended April 30, 2012 and 2011, respectively.

The Company classifies cash flows resulting from the tax benefits from tax deductions recognized upon the exercise of stock options or SARS (tax benefits) as financing cash flows. For the years ended April 30, 2012 and 2011, the Company realized $9,000 and $39,000, respectively, of tax benefits from the exercise of stock options and SARS.

Independent Contractor Stock Option Plan:

The Company had an Independent Contractor Stock Option Plan under which up to 350,000 shares could be granted. This plan was terminated in fiscal year 2006. An Independent Contractor Stock Option Committee determined to whom options may be granted from among eligible participants, the timing and duration of option grants, the option price, and the number of shares of common stock subject to each option. Options were granted to certain independent contractors at a price equal to the then fair market value of the Company’s common stock. The options were exercisable over specified periods per terms of the individual agreements. No compensation expense was recorded during the years ended April 30, 2012 and 2011 as no other grants were made in those years and previous grants have been fully expensed. As a result of the adoption by the stockholders of the 2005 Stock Award Plan, the Independent Contractor Stock Option Plan was discontinued. No additional grants will be made under this plan and the outstanding grant will expire in fiscal year 2015.

Transactions under this plan, including the weighted average exercise prices of the options, are as follows:

	2012				2011
			Wtd Avg					Wtd Avg
	Shares		Price		Shares			Price
Outstanding at beginning of year		30,000	$	14.76		36,000		$	14.93
Expired		-				(6,000	)		15.80
Exercised		-		-		-			-
Outstanding at end of year		30,000	$	14.76		30,000		$	14.76
Exercisable at end of year		30,000	$	14.76		30,000		$	14.76

Restricted Stock Plan:

During fiscal 1990, the Company adopted a Restricted Stock Plan which provided that key management employees could be granted rights to purchase an aggregate of 375,000 shares of the Company's common stock. The grants, transferability restrictions and purchase price were determined at the discretion of a special committee of the board of directors. The purchase price could not be less than the par value of the common stock. As a result of the adoption by the Company’s stockholders of the 2005 Stock Award Plan, the Restricted Stock Plan was discontinued. No additional grants will be made under this plan. As of April 30, 2012 and 2011, grants for 7,500 are available to be purchased at a price of $4.00 per share.

Transferability of shares is restricted for a four-year period, except in the event of a change in control as defined.

Employee Stock Ownership Plan/Stock Bonus Plan:

During 1990, the Company amended its Stock Bonus Plan to become an Employee Stock Ownership Plan (“ESOP”). By means of a bank note, subsequently repaid, the Company reacquired 561,652 shares of its common stock during fiscal 1990. These shares plus approximately 510,000 additional shares issued by the Company from its authorized, unissued shares were sold to the ESOP in May 1990. Shares were released for allocation to participants based on a formula as specified in the ESOP document. By the end of fiscal 2000, all shares (1,071,652) had been allocated to participant accounts of which 417,244 shares remain in the ESOP.

Deferred Compensation Agreements:

The Company has a series of agreements with key employees providing for the payment of benefits upon retirement or death. Under these agreements, each key employee receives specified retirement payments for the remainder of the employee's life with a minimum payment of ten years' benefits to either the employee or his beneficiaries. The agreements also provide for lump sum payments upon termination of employment without cause and reduced benefits upon early retirement. The Company pays the benefits out of its working capital, but has also purchased whole life or term life insurance policies on the lives of certain of the participants to cover the optional lump sum obligations of the agreements upon the death of the participant. Deferred compensation expense charged to selling and administrative expenses during the years ended April 30, 2012 and 2011 was approximately $796,000 and $675,000, respectively.

Life Insurance Policies and Cash Held in Trust:

The whole-life insurance policies on the lives of certain participants covered by deferred compensation agreements have been placed in a trust. Upon the death of any insured participant, cash received from life insurance policies in excess of the Company’s deferred compensation obligations to the estate or beneficiaries of the deceased, are also placed in the trust. These assets belong to the Company until a change of control event, as defined in the trust agreement, should occur. At that time, the Company is required to add sufficient cash to the trust so as to match the deferred compensation liability described above. Such funds will be used to continue the deferred compensation arrangements following a change of control.

Income Taxes

12 Months Ended

Apr. 30, 2012

Income Taxes

13. Income Taxes

The income before benefit for income taxes consisted of (in thousands):

	Year Ended April 30,
	2012			2011
U.S.	$	7,426		$	3,781
Foreign		(612	)		(186	)
	$	6,814		$	3,595

The benefit for income taxes consists of the following (in thousands):

	2012			2011
Current:
Federal	$	2,534		$	1,134
Foreign		-			-
State		6			(4	)
Current provision		2,540			1,130
Deferred
Federal		16			40
Foreign		(49	)		(60	)
State		(10	)		105
Deferred (benefit) provision		(43	)		85
Change in valuation allowance		(3,057	)		(3,635	)
Total benefit	$	(560	)	$	(2,420	)

The following table reconciles the reported income tax (benefit) expense with the amount computed using the federal statutory income tax rate (in thousands)

	2012			2011
Computed "expected" tax expense	$	2,316		$	1,222
State and local tax, net of federal benefit		(3	)		67
Valuation allowance on deferred tax assets		(3,057	)		(3,635	)
Nontaxable income from foreign subsidiaries		72			52
Nondeductible expenses		143			125
Nontaxable life insurance cash value increase		(150	)		(116	)
Write off benefit from equity investment losses		466			-
Tax credits		(350	)		(279	)
Other items, net, none of which individually exceeds 5% of federal taxes at statutory rates		3			144
	$	(560	)	$	(2,420	)

The components of deferred taxes are as follows (in thousands):

	2012			2011
Deferred tax assets:
Employee benefits	$	5,320		$	4,980
Inventory		2,055			1,580
Accounts receivable		525			340
Marketable securities		-			200
Tax credits		1,140			1,030
Other liabilities		332			270
Net operating loss carryforwards		2,800			570
Total deferred tax asset		12,172			8,970
Deferred tax liabilities
Marketable securities		243			-
Property, plant and equipment		1,630			1,070
Net deferred tax asset		10,299			7,900
Valuation allowance		(1,455	)		(4,570	)
Net deferred tax assets	$	8,844		$	3,330

Net deferred tax assets are comprised of the following (in thousands):

	2012			2011
Gross current assets	$	4,092		$	2,890
Valuation allowance		(697	)		(310	)
Current liabilities		(243	)		-
Net current deferred tax assets		3,152			2,580

Gross noncurrent assets		8,080			6,080
Valuation allowance		(758	)		(4,260	)
Noncurrent liabilities		(1,630	)		(1,070	)
Net noncurrent deferred tax assets		5,692			750
Net deferred tax assets	$	8,844		$	3,330

The total valuation allowance relates to deferred tax assets of both domestic and foreign subsidiaries. The change in valuation allowance during the year ended April 30, 2012 was a decrease of $3.1 million, including foreign exchange adjustments of $58,000 and the $43,000 tax effect of unrealized gains on marketable securities. For the year ended April 30, 2011, the change was a decrease of $3.5 million including foreign exchange adjustments of $48,000 and the $95,000 tax effect of unrealized gains on marketable securities.

During the fourth quarters of both fiscal year 2012 and 2011, the Company reduced its valuation allowance against deferred tax assets in the amounts of $3.1 million and $3.6 million, respectively. This recognition was the result of an evaluation of the Company’s net operating losses incurred in prior years, its recent history of three consecutive years of increasing profitability and recent contract bookings which have increased the Company’s long-term backlog to a higher level. Company management believes such contracts will enable the Company to continue to generate operating profits in fiscal year 2013 and beyond. These adjustments were made in the fourth quarters of fiscal 2012 and 2011 as the Company waited until it had results for the full year to make final its determination, given the existence of a loss in recent years, that it met the accounting threshold for determination that the recovery of the deferred tax asset was more likely than not and to estimate the appropriate balance of the valuation allowance, based on all available information. The amount of the non-cash valuation allowance reductions were based on management’s estimates of taxable income by reporting segment and taxing jurisdictions and the periods over which the Company believes deferred tax assets will be recoverable.

At April 30, 2012, the Company has available approximately $1.2 million in net operating losses available to offset future income of certain of its foreign subsidiaries. These loss carryforwards have no expiration date. As a result of the acquisition of FEI-Elcom, the Company has a federal net operating loss carryforward of $6.6 million which may be applied in annually limited amounts to offset future U.S.-sourced taxable income over the next 20 years. For State of California income tax purposes, the Company has a tax loss carryforward of approximately $2.3 million which expires in 20 years.

The Company has evaluated its tax positions and has concluded that the tax positions meet the more-likely-than-not recognition threshold as specified under accounting standards. It is difficult to predict what would occur to change the Company’s unrecognized tax benefits over the next twelve months. The Company believes, however, that there should be no change during the next twelve months. The Company's tax returns for April 30, 2006 and 2007 have been examined by the Internal Revenue Service, which resulted in no material adjustments. The Company's tax years from April 30, 2005 through April 30, 2012 remain open to examination by state tax authorities and tax years from April 30, 2008 through April 30, 2012 remain open for examination by the Internal Revenue Service.

- Definition

The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Regulation S-X (SX)
-Number 210
-Section 08
-Paragraph h
-Article 4

Reference 2: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 109
-Paragraph 136, 172
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 3: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 109
-Paragraph 43, 44, 45, 46, 47, 48, 49
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Reference 4: http://www.xbrl.org/2003/role/presentationRef
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-Paragraph 1
-Subparagraph (SX 210.4-08.(h))
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+ Details

Product Warranties

12 Months Ended

Apr. 30, 2012

Product Warranties

14. Product Warranties

The Company generally provides its customers with a one-year warranty regarding the manufactured quality and functionality of its products. For some limited products, the warranty period has been extended. The Company establishes warranty reserves based on its product history, current information on repair costs and annual sales levels. Changes in the carrying amount of accrued product warranty costs are as follows (in thousands):

	Year Ended April 30,
	2012			2011
Balance at beginning of year	$	145		$	145
Acquired reserve of FEI-Elcom		370			-
Warranty costs incurred		(192	)		(156	)
Product warranty accrual		455			156
Balance at end of year	$	778		$	145

Segment Information

12 Months Ended

Apr. 30, 2012

Segment Information

15. Segment Information

The Company operates under three reportable segments based on the geographic locations of its subsidiaries:

(1)

FEI-NY – operates out of New York and its operations consist principally of precision time and frequency control products used in three principal markets- communication satellites (both commercial and U.S. Government-funded); terrestrial cellular telephone or other ground-based telecommunication stations and other components and systems for the U.S. military.

(2)

Gillam-FEI - operates out of Belgium and France and primarily sells wireline synchronization and network management systems in non-U.S. markets. All sales from Gillam-FEI to the United States are to other segments of the Company.

(3)

FEI-Zyfer – operates out of California and its products incorporate Global Positioning System (GPS) technologies into systems and subsystems for secure communications, both government and commercial, and other locator applications. This segment also provides sales and support for the Company’s wireline telecommunications family of products, including US5G, which are sold in the United States market.

The FEI-NY segment also includes the operations of the Company’s wholly-owned subsidiaries, FEI-Elcom and FEI-Asia. FEI-Asia functions as a manufacturing facility for the FEI-NY segment with minimal sales to outside customers. FEI-Elcom, in addition to its own product line, provides design and technical support for the FEI-NY segment’s satellite business.

The Company’s Chief Executive Officer measures segment performance based on total revenues and profits generated by each geographic location rather than on the specific types of customers or end-users. Consequently, the Company determined that the segments indicated above most appropriately reflect the way the Company’s management views the business.

The accounting policies of the three segments are the same as those described in the “Summary of Significant Accounting Policies.” The Company evaluates the performance of its segments and allocates resources to them based on operating profit which is defined as income before investment income, interest expense and taxes. The European-based director of Gillam-FEI and the president of FEI-Zyfer manage the assets of these segments. All acquired assets, including intangible assets, are included in the assets of these two segments.

The table below presents information about reported segments for each of the years ended April 30 with reconciliation of segment amounts to consolidated amounts as reported in the statement of operations or the balance sheet for each of the years (in thousands):

	2012			2011
Net revenues:
FEI-NY	$	44,711		$	33,204
Gillam-FEI		12,811	**		13,165	**
FEI-Zyfer		11,494			10,737
less intersegment revenues		(5,421	)**		(3,883	)**
Consolidated revenues	$	63,595		$	53,223

Operating profit (loss):
FEI-NY	$	7,938		$	3,536
Gillam-FEI		138	**		66	**
FEI-Zyfer		(511	)		204
Corporate		(862	)		(316	)
Consolidated operating profit (loss)	$	6,703		$	3,490

**For fiscal years ended April 30, 2012 and 2011, includes Gillam-FEI intersegment sales of $3.9 million and $2.5 million, respectively, to the FEI-NY and FEI-Zyfer segments. Such sales consist principally of manufacture of assemblies and units of a wireline synchronization product for ultimate production and sale in the U.S. plus the costs of ongoing research and development costs to support the product line. In the Gillam-FEI segment, these transactions increased the operating profit in each of the fiscal years.

	2012			2011
Identifiable assets:
FEI-NY (approximately $3 million in China)	$	50,234		$	37,912
Gillam-FEI (all in Belgium or France)		20,407			20,875
FEI-Zyfer		9,685			8,434
less intersegment receivables		(16,424	)		(16,295	)
Corporate		42,325			38,905
Consolidated identifiable assets	$	106,227		$	89,831

Depreciation and amortization (allocated):
FEI-NY	$	1,590		$	1,331
Gillam-FEI		425			353
FEI-Zyfer		207			234
Corporate		19			19
Consolidated depreciation and amortization expense	$	2,241		$	1,937

Major Customers

The Company's products are sold to both commercial and governmental customers. For the years ended April 30, 2012 and 2011, approximately 46% and 54%, respectively, of the Company's sales were made under contracts to the U.S. Government or subcontracts for U.S. Government end-use.

In fiscal year 2012, sales to three customers of the FEI-NY segment aggregated $29.3 million or 66% of that segment’s total sales. Each of these customers also exceeded 10% of the Company’s consolidated revenues. During the year ended April 30, 2012, in the Gillam-FEI segment, sales to one customer exceeded 10% of that segment’s revenues. In the FEI-Zyfer segment, one customer accounted for more than 10% of that segment’s sales. None of the customers in the Gillam-FEI and FEI-Zyfer segments accounted for more than 10% of consolidated revenues.

In fiscal year 2011, sales to five customers of the FEI-NY segment aggregated $22.6 million or 68% of that segment’s total sales. One of these customers, when combined with sales from the FEI-Zyfer segment, exceeded 10% of the Company’s consolidated revenues. During the year ended April 30, 2011, in the Gillam-FEI segment, sales to one customer exceeded 10% of that segment’s revenues. In the FEI-Zyfer segment, two customers each accounted for more than 10% of that segment’s sales. None of the customers in the Gillam-FEI segment and no customer individually in the FEI-Zyfer segment accounted for more than 10% of consolidated revenues.

The loss by the Company of any one of these customers would have a material adverse effect on the Company’s business. The Company believes its relationship with these customers to be mutually satisfactory. Sales to major customers above can include commercial and governmental end users.

Foreign Sales

Revenues in each of the Company’s segments include sales to foreign governments or to companies located in foreign countries. Revenues, based on the location of the procurement entity, were derived from the following countries:

	(in thousands)
	2012		2011
France	$	8,480	$	1,946
Belgium		4,254		5,617
China		899		2,571
Other		7,533		4,875
	$	21,166	$	15,009

- Definition

The entire disclosure for reporting segments including data and tables. Reportable segments include those that meet any of the following quantitative thresholds a) it's reported revenue, including sales to external customers and intersegment sales or transfers is 10 percent or more of the combined revenue, internal and external, of all operating segments b) the absolute amount of its reported profit or loss is 10 percent or more of the greater, in absolute amount of 1) the combined reported profit of all operating segments that did not report a loss or 2) the combined reported loss of all operating segments that did report a loss c) its assets are 10 percent or more of the combined assets of all operating segments.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 131
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

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+ Details