Frequency Electronics Announces Results for 2nd Quarter Fiscal Year 2005
MITCHEL FIELD, N.Y.--(BUSINESS WIRE)--Dec. 9, 2004--Frequency Electronics, Inc. (AMEX-FEI) today announced that revenues for the second quarter of fiscal year 2005, which ended 31 October 2004, were $14.4 million compared to $10.0 million for the same period of fiscal 2004, and $17.7 million for the first quarter of fiscal 2005.
For the six month period ended 31 October 2004, revenues were $32.0 million compared to $18.8 million in the first six months of the previous fiscal year.
In the second quarter, the Company recorded net income of $854,000 or $0.10 per diluted share, compared to a net loss of $213,000 ($0.03 per diluted share) in the same quarter of fiscal 2003. Income in the first quarter of 2005 was $1.0 million or $0.12 per diluted share.
For the six month period ended 31 October 2004, net income was $1.9 million or $0.22 per diluted share, compared to a net loss of $941,000 ($0.11 per diluted share) in the first six months of the previous fiscal year.
Prior period earnings per share and net income have been adjusted to include the Company's equity income from its investment in Morion, Inc. (See the Company's Press Release: "Frequency Electronics Increases Investment in Morion," dated September 30, 2004.)
Commenting on these results, General Joseph Franklin, Chairman of the Board, said: "Our second quarter results are in line with expectations. Our backlog and current indications from major customers support our positive outlook for increased revenues and profitability for this full Fiscal Year. We are particularly pleased with the continuing improvement in our margins."
Revenues for the Commercial Communications segment were $9.9 million for this past quarter and $21.2 million for the first six months of fiscal 2005. Revenues for the first six months of fiscal 2004 were $11.0 million. Included in the first six months of fiscal 2005 are commercial satellite sales, which rose to $3.2 million compared to $380,000 in the first six months of fiscal 2004.
Second quarter revenues for the US government segment were $1.6 million and $3.3 million for the first six months of fiscal 2005. Revenues for the first six months of fiscal 2004 were $3.7 million. For the most part, these revenues represent the early development work for a significant number of programs with large potential.
Gillam-FEI recorded revenues of $2.3 million for the second quarter and $5.0 million for the first six months of fiscal 2005. Revenues for the first six months of fiscal 2004 were $2.5 million.
FEI-Zyfer's revenues for the second quarter were $2.1 million and $4.2 million for the first six months of fiscal 2005. Revenues for the first six months of fiscal 2004 were $2.0 million.
Research and development expenses rose from $1.2 million in the first quarter of fiscal 2005 to $1.6 million in the second quarter, increasing from 7% to 11% of revenues.
Chief Financial Officer Alan Miller added the following comment: "Results for this quarter and the first half of this fiscal year show continuing improvement in the Company's operations. Our subsidiary in China recorded its first operating profit, which contributed to the rise of our gross margin in the second quarter from 33% to 37%."
About Frequency Electronics
Frequency Electronics, Inc. is a world leader in the design, development and manufacture of high-technology frequency, timing and synchronization products for voice, video and data telecommunications delivered by satellite or terrestrial means for both commercial and DOD customers. The Company's technologies provide unique solutions that are essential building blocks for the next generation of broadband wireless and fiber optic communications systems, for critical defense applications and for the ongoing expansion of existing wireless and wireline networks. Additional information is available on FEI's website: www.frequencyelectronics.com.
Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995: The Statements in this press release regarding the future constitute "forward-looking" statements pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements inherently involve risks and uncertainties that could cause actual results to differ materially from the forward-looking statements. Factors that would cause or contribute to such differences include, but are not limited to, inability to integrate operations and personnel, actions by significant customers or competitors, general domestic and international economic conditions, consumer spending trends, reliance on key customers, continued acceptance of the Company's products in the marketplace, competitive factors, new products and technological changes, product prices and raw material costs, dependence upon third-party vendors, competitive developments, changes in manufacturing and transportation costs, the availability of capital, and other risks detailed in the Company's periodic report filings with the Securities and Exchange Commission. By making these forward-looking statements, the Company undertakes no obligation to update these statements for revisions or changes after the date of this release.
Frequency Electronics, Inc. and Subsidiaries Consolidated Condensed Summary of Operations
Quarter Ended Six Months Ended October 31, October 31, 2004 2003(a) 2004(a) 2003(a) (unaudited) (unaudited) (in thousands except per share data)
Net Sales $14,362 $10,025 $32,045 $18,779 Cost of Sales 9,103 6,705 21,008 12,892 Gross Margin 5,259 3,320 11,037 5,887
Selling and Administrative 2,895 2,778 6,188 5,315 Research and Development 1,589 1,247 2,825 2,915 Operating Profit (Loss) 775 (705) 2,024 (2,343)
Interest and Other, Net (a) 411 502 864 1,217
Income (Loss) before Taxes & Minority Interest 1,186 (203) 2,888 (1,126) Minority Interest (20) (52) (1) (107)
Income (Loss) before Income Taxes 1,206 (151) 2,889 (1,019)
Income Tax Provision (Benefit) 352 62 1,000 (78) Net Income (Loss) $ 854 $ (213) $ 1,889 $ (941)
Net Income (Loss) per Share: Basic $ 0.10 $ (0.03) $ 0.22 $ (0.11) Diluted $ 0.10 $ (0.03) $ 0.22 $ (0.11)
Average Shares Outstanding Basic 8,487,145 8,367,003 8,460,881 8,357,568 Diluted 8,666,792 8,367,003 8,660,079 8,357,568
(a) Prior period amounts have been restated to reflect the Company's equity income from its investment in Morion, Inc.
Frequency Electronics, Inc. and Subsidiaries Consolidated Condensed Balance Sheets
October 31, April 30, 2004 2004 (in thousands) ASSETS Cash & Marketable Securities $ 32,916 $ 31,389 Accounts Receivable 14,344 15,036 Inventories 21,336 21,925 Other Current Assets 3,272 4,485 Property, Plant & Equipment 11,257 11,486 Other Assets 9,567 8,339 -------- -------- $ 92,692 $ 92,660
LIABILITIES AND STOCKHOLDERS' EQUITY Current Liabilities $ 8,278 $ 11,827 Long-term Obligations and Other 17,260 17,657 Stockholders' Equity 67,154 63,176 -------- -------- $ 92,692 $ 92,660
CONTACT: Frequency Electronics, Inc. General Joseph P. Franklin, 516-794-4500 www.frequencyelectronics.com
SOURCE: Frequency Electronics, Inc.