Frequency Electronics, Inc., Announces Fiscal Year 2004 Results
MITCHEL FIELD, N.Y.--(BUSINESS WIRE)--July 7, 2004--Frequency Electronics, Inc. (AMEX-FEI) today announced that revenues for the Fourth Quarter of Fiscal Year 2004, which ended 30 April 2004, were $17.3 million, compared to $7.0 million for the same period of fiscal 2003. For Fiscal Year 2004, revenues were $50.1 million compared to $31.5 million in the previous fiscal year.
In the Fourth Quarter, the Company recorded net income of $805 thousand ($0.09 per diluted share). For Fiscal Year 2004, net income was $162 thousand ($0.02 per diluted share) compared to a loss of $8.9 million ($1.06 diluted share), for both the Fourth Quarter and the entire Fiscal Year 2003. Results for fiscal 2004 include revenues of $6.5 million from FEI-Zyfer which was acquired at the beginning of the fiscal year.
Commenting on these results, Chairman of the Board General Joseph Franklin said: "This was a dynamic year for Frequency Electronics. Our revenues grew by 60% and we met or exceeded our expectations for Fiscal Year 2004. We see positive trends continuing in Fiscal Year 2005, with substantial improvement in sales and profits."
Revenues from the Commercial Communications segment were $10.0 million in the fourth quarter of fiscal 2004. Revenues for the fiscal year rose to $29.0 million, up from $15.1 million in fiscal 2003. This included $3.3 million in commercial satellite business, compared to less than $1.0 million in fiscal 2003.
Fourth quarter revenues for the US Government segment were $1.7 million. Revenues for the fiscal year were $7.0 million, compared to $8.9 million in fiscal 2003. During the past year the primary emphasis in FEI Government Systems, Inc. focused on key development contracts. The Company expects to receive significant production contracts as a result of these ongoing development efforts.
Fourth quarter revenues for Gillam-FEI were $6.9 million. For the fiscal year, revenues were $12.2 million compared to $8.1 million in fiscal 2003. These revenues include $3.5 million of intercompany sales to FEI Communications, Inc. in connection with development work on the US5G synchronization system recently introduced in the US market.
Fourth quarter revenues for FEI-Zyfer were $2.6 million, and $6.5 million for the fiscal year. Acquired in May 2003, FEI-Zyfer more than met its goals by achieving profitability before the end of the fiscal year.
Research and development spending for fiscal 2004 increased to $5.3 million from $4.6 million in the previous year, due to over $800 thousand in R&D expenses at FEI-Zyfer. These figures do not include customer funded research and development, which rose substantially during fiscal 2004.
Cash flow for the fiscal year was impacted by investments at FEI-Zyfer and reduced revenues from Gillam-FEI, both of which occurred in the first half of the fiscal year. Positive cash flow from operations exceeded $2.0 million in the last quarter of fiscal 2004, and the Company ended the year with $31.4 million in cash, cash equivalents, and marketable securities.
According to President and CEO Martin Bloch, "Our work during the past year produced excellent results. We are beginning to see our technology leadership turn into greater market share, and the market for our technology is growing world-wide. The opportunities and our resources to exploit them have never been greater. Based on strong bookings, backlog, and proposal activity, we foresee exciting growth for FEI in the years ahead."
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 Year Ended
April 30, April 30,
2004 2003 2004 2003
---- ---- ---- ----
(unaudited)
(in thousands except per share
data)
Net Sales $17,275 $ 7,009 $50,106 $31,527
Cost of Sales 12,358 8,912 34,529 25,681
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Gross Margin (Loss) 4,917 (1,903) 15,577 5,846
Selling and Administrative 3,322 1,532 11,459 7,573
Restructuring Charge - - 428 -
Research and Development 1,027 1,664 5,336 4,605
Goodwill writedown - 6,158 - 6,158
------- ------- ------- -------
Operating Profit (Loss) 567 (11,257) (1,646) (12,490)
Interest and Other, Net 237 618 1,775 1,824
------- ------- ------- -------
Income (Loss) before Taxes &
Minority Interest 804 (10,639) 129 (10,666)
Minority Interest (12) 5 (144) (33)
------- ------- ------- -------
Income (Loss) before Income
Taxes 816 (10,644) 273 (10,633)
Income Tax Provision (Benefit) 11 (1,783) 111 (1,773)
------- ------- ------- -------
Net Income (Loss) $ 805 ($ 8,861) $ 162 ($ 8,860)
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Net Income (Loss) per Share:
Basic $ 0.10 ($ 1.06) $ 0.02 ($ 1.06)
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Diluted $ 0.09 ($ 1.06) $ 0.02 ($ 1.06)
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Average Shares Outstanding
Basic 8,403,084 8,366,038 8,374,399 8,331,785
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Diluted 8,633,585 8,366,038 8,542,575 8,331,785
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Frequency Electronics, Inc. and Subsidiaries
Consolidated Condensed Balance Sheets
April 30, April 30,
2004 2003
---- ----
(in thousands)
ASSETS
Cash & Marketable Securities $ 31,389 $ 33,781
Accounts Receivable 15,036 9,565
Inventories 21,925 17,734
Other Current Assets 4,485 6,856
Property, Plant & Equipment 11,486 11,105
Other Assets 8,339 6,688
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$ 92,660 $ 85,729
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LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities $ 11,827 $ 5,922
Long-term Obligations and Other 17,657 18,098
Stockholders' Equity 63,176 61,709
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$ 92,660 $ 85,729
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CONTACT: Frequency Electronics, Inc. General Joseph P. Franklin, 516-794-4500 www.frequencyelectronics.com
SOURCE: Frequency Electronics, Inc.