Frequency Electronics Announces Outstanding Results for 2nd Quarter FY '01

MITCHEL FIELD, N.Y.--(BUSINESS WIRE)--Dec. 11, 2000--Frequency Electronics, Inc. (AMEX-FEI) today announced that its second quarter revenues increased 79% compared to the same period last year.

Net income for the quarter, which ended October 31, 2000, rose 207% compared to a year ago. "These outstanding results reflect the continuing demand for FEI's proprietary technology products," according to General Joseph Franklin, the Company's Chairman.

Revenues for the quarter were $10.82 million, compared to $6.04 million in the same quarter of fiscal 2000. Net income rose to $1.47 million, $0.17 per diluted share, compared to $478 thousand or $0.06 per share for the same quarter of fiscal 2000. Excluding Gillam-FEI, the Company's Belgian subsidiary, revenues were $10.24 million and net income was $1.43 million.

FEI's growth is being driven by the continuing expansion of existing wireless infrastructure. The Company is in the process of increasing its production capacity to meet the needs of the current generations of wireless networks.

Discussing future business, President Martin Bloch said: "The Company is supplying timing and synchronization systems for beta-site field-testing of the next-generation of wireless networks (2.5G and 3G). We are also developing a family of products which combines time and synchronization with FEI's proprietary microwave technology for the fiber optic industry. We have delivered our first R/T (receive/transmit) modules, and expect production to begin by mid-2001. These modules are essential for increasing the throughput of fiber optic networks."

During the quarter, the Company completed its acquisition of Gillam SA. Renamed Gillam-FEI, this new Belgian subsidiary will facilitate the entry of FEI's products into the growing wireless markets in Europe. Also, Gillam-FEI produces highly competitive wireline synchronization systems that will extend FEI's reach into this growing market in the United States and worldwide. The demand for wireline synchronization systems is analogous to wireless. The requirements for connectivity, including to the Internet, from wireless to wireline systems is growing in tandem with the growth of wireless communications.

Frequency Electronics is a world leader in the design, development and manufacture of high-technology frequency, timing and synchronization products for satellite and terrestrial voice, video and data telecommunications. The Company's technologies provide unique solutions that are essential building blocks for the next generation of broadband wireless and fiber optic communications systems, and for the ongoing expansion of existing wireless and wireline networks. Additional information is available on FEI's website: www.frequencyelectronics.com.

Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995: The Statements in this press release regarding future earnings and operations and other statements relating to 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, continued acceptance of the Company's products in the marketplace, competitive factors, new products and technological changes, product prices and raw material costs, dependence upon third-party vendors, competitive developments, changes in manufacturing and transportation costs, the availability of capital, and other risks detailed in the Company's periodic report filings with the Securities and Exchange Commission. By making these forward-looking statements, the Company undertakes no obligation to update these statements for revisions or changes after the date of this release.

             Frequency Electronics, Inc. and Subsidiaries
             Consolidated Condensed Summary of Operations



                     Quarter Ended                 Six Months Ended
                      October 31,                      October 31,
                 2000            1999             2000            1999
                 ----            ----             ----            ----
                      (unaudited)                      (unaudited)
                          (in thousands except per share data)



Net Sales                   $10,819    $ 6,036     $19,712    $11,500
Cost of Sales                 6,128      3,355      11,109      6,427
                           --------   --------     -------   --------
       Gross Margin           4,691      2,681       8,603      5,073



Selling and Administrative    2,049      1,112       4,178      2,324
Research and Development      1,162      1,240       2,366      2,490
                           --------   --------    --------   --------
       Operating Profit       1,480        329       2,059        259
Interest and Other, Net         696        429       1,314      1,173
                           --------   --------    --------   --------
Earnings before
income taxes                  2,176        758       3,373      1,432
Income Tax Provision            705        280       1,095        510
                           --------    -------    --------  ---------
       Net Earnings         $ 1,471    $   478     $ 2,278    $   922
                           ========    =======    ========  =========



Net Earnings per Share:
         Basic              $ 0.18     $  0.06     $ 0.28      $ 0.12
                            ======      ======     ======      ======
         Diluted            $ 0.17     $  0.06     $ 0.27      $ 0.12
                            ======      ======     ======      ======
Average Shares Outstanding



         Basic             8,187,718  7,577,010   8,108,624  7,566,569
                           =========  =========   =========  =========
         Diluted           8,646,789  7,979,270   8,567,859  7,933,654
                           =========  =========   =========  =========





             Frequency Electronics, Inc. and Subsidiaries
                 Consolidated Condensed Balance Sheets



                                    October 31,             April 30,
                                       2000                   2000
                                       ----                   ----
                                              (in thousands)



ASSETS



    Cash & Marketable Securities      $35,682                $41,007
    Other Current Assets               38,598                 26,166
    Property, Plant & Equipment        11,869                  9,040
    Other Assets                        9,874                  4,634
                                    ---------              ---------
                                      $96,023                $80,847
                                      =======                =======





LIABILITIES AND STOCKHOLDERS' EQUITY



    Current Liabilities               $11,242                $ 5,008
    Long-term Obligations              18,412                 16,849
    Stockholders' Equity               66,369                 58,990
                                     --------               --------
                                      $96,023                $80,847
                                      =======                =======