UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (date of earliest event reported): December 10, 2020
Frequency Electronics, Inc.
(Exact name of registrant as specified in its charter)
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Delaware |
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1-8061 |
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11-1986657 |
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(State or Other Jurisdiction of
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(Commission File Number)
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(IRS Employer Identification
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55 Charles Lindbergh Blvd.,
Mitchel Field, New York 11553
(Address of principal executive offices, including zip code)
Registrant’s telephone number, including area code: (516) 794-4500
(Former name or former address, if changed since last report): Not Applicable
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Securities registered pursuant to Section 12(b) of the Act:
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Title of each class |
Trading Symbol(s) |
Name of each exchange on which registered |
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Common Stock (par value $1.00 per share) |
FEIM |
NASDAQ Global Market |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
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Item 2.02. |
Results of Operations and Financial Condition. |
On December 10, 2020, Frequency Electronics, Inc. (the “Company”) issued a press release announcing its financial results for the quarter ended October 31, 2020. A copy of the press release is attached as Exhibit 99.1 to this Current Report on Form 8-K and incorporated herein by reference.
In accordance with General Instruction B.2 of Form 8-K, the information in this Current Report on Form 8-K, including Exhibit 99.1 hereto, shall not be deemed “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that section. The information in this Current Report shall not be incorporated by reference into any filing or other document pursuant to the Securities Act of 1933, as amended, except as shall be expressly set forth by specific reference in such filing or document.
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Item 9.01. |
Financial Statements and Exhibits. |
(d) Exhibits
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99.1 |
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| Date: December 10, 2020 | |
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FREQUENCY ELECTRONICS, INC.
By: /s/ Steven L. Bernstein Name: Steven L. Bernstein Title: Chief Financial Officer, Secretary and Treasurer |
Exhibit 99.1
PRESS RELEASE
Frequency Electronics, Inc. Announces Second Quarter Fiscal Year 2021 Results
Mitchel Field, NY, December 10, 2020 – Frequency Electronics, Inc. (“FEI” or the “Company”) (NASDAQ-FEIM) is reporting revenues for the three and six month periods of fiscal 2021, ended October 31, 2020, of $14.0 million and $26.9 million, respectively, compared to revenues of $9.1 million and $21.6 million, respectively, for the same periods of fiscal 2020, ended October 31, 2019. Operating profit for the second quarter of fiscal 2021 was $219,000 compared to an operating loss of $4.9 million for the same period of fiscal 2020. Operating loss was $119,000 for the six months ended October 31, 2020 compared to an operating loss of $5.7 million for the six months ended October 31, 2019. Net income for the three and six months ended October 31, 2020 was $329,000 or $0.04 per diluted share and $67,000 or $0.01 per diluted share, respectively, compared to net losses of $4.9 million or ($0.54) per share and $5.5 million or ($0.61) per share, respectively, for the same periods of fiscal 2020.
FEI CEO Stan Sloane commented, “I am very pleased with our results this quarter. We saw revenues increase to almost $14 million, about a $1 million increase from first quarter, and a 54% increase from the second quarter of fiscal year 2020. Despite significant legal expenses this year, we generated net income for the quarter of $329,000 a substantial improvement from last quarter and Q2 of the prior year. Further, as we completed the problem contracts we described in previous quarters, we also saw a return to improved gross margins, which were 38% in the current quarter as compared to 32% last quarter and negative 13% a year ago. Backlog was up to $42 million, a $6 million increase from the end of fiscal year 2020, a reflection of all the new business opportunities we have talked about in prior calls. We also generated $2 million of cash from operations for the year. We have hired engineering and manufacturing staff in order to address the increased backlog and have maintained full operations through the quarter while closely monitoring COVID-19 developments in order to be prepared for possible impacts to our workforce or in our supply chain. All in all, a good quarter I am pleased to report.”
Fiscal Year 2021 Selected Financial Metrics and Other Items
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For the six months ended October 31, 2020, revenues from satellite payloads were approximately $14.2 million, or 53%, of consolidated revenues compared to $9.4 million, or 44%, for the prior year. For the three months ended October 31, 2020, revenues from satellite payloads were approximately $7.6 million, or 54%, of consolidated revenues compared to $5.5 million, or 61%, for the prior year. |
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For the six months ended October 31, 2020, revenues for non-space U.S. Government/DOD customers were $10.9 million, or 40%, of consolidated revenues compared to $9.0 million, or 42%, for the prior year. For the three months, ended October 31, 2020, revenues for non-space U.S. Government/DOD customers were $5.5 million, or 39%, of consolidated revenues compared to $2.3 million, or 25%, for the prior year. |
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For the six months ended October 31, 2020, revenues from other commercial and industrial sales accounted for approximately $1.9 million, or 7%, of consolidated revenues compared to approximately $3.2 million, or 15%, for the prior year. For the three months ended October 31, 2020, revenues from other commercial and industrial sales accounted for approximately $894,000, or 6% of consolidated revenues compared to approximately $1.3 million, or 14%, for the prior year. |
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Net cash provided by operating activities for the six months ended October 31, 2020 was $2.0 million compared to $180,000 in the comparable prior fiscal 2020 period. |
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Backlog at October 31, 2020 was $42 million compared to $36 million at April 30, 2020. |
Investor Conference Call
As previously announced, the Company will hold a conference call to discuss these results on Thursday, December 10, 2020, at 4:30 PM Eastern Time. Investors and analysts may access the call by dialing 1-877-407-9205. International callers may dial 1-201-689-8054. Ask for the Frequency Electronics conference call.
The archived call may be accessed by calling 1-877-481-4010 (domestic), or 1-919-882-2331 (international), for one week following the call. Subsequent to that, the call can be accessed via a link available on the company’s website through March 10, 2020.
About Frequency Electronics
Frequency Electronics, Inc. is a world leader in the design, development and manufacture of high precision timing, frequency generation and RF control products for space and terrestrial applications. Frequency’s products are used in satellite payloads and in other commercial, government and military systems including C4ISR and electronic warfare, missiles, UAVs, aircraft, GPS, secure communications, energy exploration and wireline and wireless networks. Frequency has received over 100 awards of excellence for achievements in providing high performance electronic assemblies for over 150 space and DOD programs. The Company invests significant resources in research and development to expand its capabilities and markets.
Frequency’s Mission Statement: “Our mission is to provide precision time and low phase noise frequency generation systems from 1 Hz to 50 GHz, for space and other challenging environments.”
Subsidiaries and Affiliates: FEI-Zyfer provides GPS and secure timing ("SAASM") capabilities for critical military and commercial applications; FEI-Elcom Tech provides Electronic Warfare (“EW”) sub-systems and state-of-the-art RF microwave products. Additional information is available on the Company’s website: www.frequencyelectronics.com
Contact information: Stanton Sloane, President & Chief Executive Officer;
Steven Bernstein, Chief Financial Officer;
Telephone: (516) 794-4500 ext. 5000 WEBSITE: www.freqelec.com
Frequency Electronics, Inc. and Subsidiaries
Condensed Consolidated Statements of Operations
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Three Months Ended October 31, (unaudited) |
Six Months Ended October 31, (unaudited) |
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2020 |
2019 |
2020 |
2019 |
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Revenues |
$ | 13,990 | $ | 9,087 | $ | 26,940 | $ | 21,641 | ||||||||
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Cost of Revenues |
8,668 | 10,269 | 17,530 | 18,870 | ||||||||||||
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Gross Margin |
5,322 | (1,182 |
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9,410 | 2,771 | |||||||||||
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Selling and Administrative |
4,124 | 2,290 | 7,352 | 4,743 | ||||||||||||
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Research and Development |
979 | 1,450 | 2,177 | 3,731 | ||||||||||||
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Operating Income Loss |
219 | (4,922 |
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(119 |
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(5,703 |
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Interest and Other, Net |
127 | 22 | 211 | 232 | ||||||||||||
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Income (Loss) before Income Taxes |
346 | (4,900 |
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92 | (5,471 |
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Income Tax Benefit |
17 | 9 | 25 | 29 | ||||||||||||
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Net (Loss) Income |
$ | 329 | $ | (4,909 |
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$ | 67 | $ | (5,500 |
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Net Income (Loss) per share: |
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Basic and diluted (loss) earnings per share |
$ | 0.04 | $ | (0.54 |
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$ | 0.01 | $ | (0.61 |
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Average Shares Outstanding |
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Basic |
9,170 | 9,072 | 9,154 | 9,037 | ||||||||||||
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Diluted |
9,236 | 9,072 | 9,206 | 9,037 | ||||||||||||
Frequency Electronics, Inc. and Subsidiaries
Condensed Consolidated Balance Sheets
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October 31, 2020 |
April 30, 2020 |
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(unaudited) |
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(in thousands) |
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ASSETS |
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Cash & Marketable Securities |
$ | 13,602 | $ | 14,378 | ||||
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Accounts Receivable |
10,298 | 4,392 | ||||||
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Costs and Estimated Earnings |
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in Excess of Billings, net |
3,201 | 6,953 | ||||||
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Inventories, net |
21,028 | 22,958 | ||||||
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Other Current Assets |
2,793 | 2,554 | ||||||
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Property, Plant & Equipment, net |
10,511 | 11,267 | ||||||
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Other Assets |
17,951 | 17,910 | ||||||
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Right-of-Use Assets – Leases |
10,235 | 10,864 | ||||||
| $ | 89,619 | $ | 91,276 | |||||
LIABILITIES AND STOCKHOLDERS’ EQUITY
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Lease Liability - current |
$ | 1,612 | $ | 1,869 | ||||
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Current Liabilities |
9,631 | 11,119 | ||||||
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Other Long-term Obligations |
14,783 | 14,608 | ||||||
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Lease Liability – non-current |
8,937 | 9,444 | ||||||
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Stockholders’ Equity |
54,656 | 54,236 | ||||||
| $ | 89,619 | $ | 91,276 |