Frequency Electronics Announces Year-End Adjustments
MITCHEL FIELD, N.Y., May 12, 2003 (BUSINESS WIRE) -- Frequency Electronics, Inc. (AMEX-FEI) announced today that it had recorded certain non-cash adjustments for fiscal year 2003 which recently ended on April 30, 2003.
CFO Alan Miller stated "Based on current valuations of companies in the telecommunications industry, FEI determined that an adjustment for the valuation assigned to its investment in its wholly-owned Belgian subsidiary, Gillam-FEI, was appropriate. Accordingly, we are writing-off all goodwill associated with this investment in the amount of approximately $6 million."
In addition, immediately prior to year end, the India Space Research Office ("ISRO"), an agency of the Government of India, cancelled a $964,000 contract for certain space modules. This contract was signed in 1999 and initially received export approval from the US Government. Prior to delivery, however, the US State Department placed a hold on such exports to India. The State Department eventually reinstated its approval during fiscal 2003 but, due to the delays stemming from the export hold, ISRO could not incorporate FEI's modules into the project for which they were originally intended and exercised its right to cancel the contract. Costs associated with this contract approximated $700,000 and have been expensed during the fiscal year ended April 30, 2003. FEI Chairman, General Joseph Franklin, noted: "Events that were totally beyond our control caused us to lose this ISRO space project. Fortunately, the international picture has improved and ISRO has informed us that they have a strong desire to continue with FEI as an important partner in their expanding space business."
Also today, Frequency Electronics issued a press release announcing a new acquisition.
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.
SOURCE: Frequency Electronics, Inc.
Frequency Electronics, Inc., Mitchel Field
General Joseph P. Franklin, 516-794-4500
website: www.frequencyelectronics.com