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): June 21, 2007
FREQUENCY ELECTRONICS, INC.
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(Exact name of registrant as specified in its charter)
Delaware 1-8061 11-1986657
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(State or other jurisdiction (Commission (I.R.S. Employer
of incorporation) File Number) Identification No.)
55 Charles Lindbergh Blvd., Mitchel Field, NY 11553
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(Address of principal executive offices) (Zip Code)
(516) 794-4500
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(Registrant's telephone number, including area code)
NONE
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(Former name, former address and former fiscal year,
if changed since last report)
________________________________________________________________________________
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))
ITEM 8.01 Other Items
Effective June 21, 2007, Frequency Electronics, Inc., ("Frequency")
completed the sale of 28.5% of the outstanding shares of Morion, Inc. ("Morion")
to Finproject, Ltd. ("Finproject"), a wholly-owned subsidiary of Gazprombank, a
Russian government majority-owned bank. Earlier this year, the Russian
Federation declared Morion to be in a "strategic industry." Russian Federation
regulations limit the ownership by foreign entities or non-Russian investors in
companies with a strategic industry designation. As a consequence, Finproject
acquired the majority interest in Morion, which included the purchase of a
portion of the shares previously held by Frequency. Frequency received total
proceeds of approximately $5.8 million, and as a result, will recognize a
pre-tax book gain of approximately $3.1 million in the first quarter of fiscal
year 2008, which ends July 31, 2007. In future periods, Frequency will account
for its remaining 8% interest in Morion on the cost basis.
ITEM 9.01 (c). EXHIBITS.
99.1 Press Release of Frequency Electronics, Inc., dated June 26,
2007.
SIGNATURES
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.
FREQUENCY ELECTRONICS, INC.
By: /s/ Alan Miller
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Alan Miller
Chief Financial Officer
and Treasurer
Dated: June 27, 2007
EXHIBIT INDEX
Paper (P) or
Exhibit No. Description Electronic (E)
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99.1 Press Release of Frequency Electronics, E
Inc., dated June 26, 2007.
Exhibit 99.1
PRESS RELEASE
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Frequency Electronics, Inc. Reduces Investment in Morion, Inc.
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Mitchel Field, NY, June 26, 2007 - Frequency Electronics, Inc. (NASDAQ-FEIM) has
reduced its investment in Morion, Inc., to 8% of its outstanding shares by
selling 28.5% of Morion's shares to Finproject, Ltd., a wholly-owned subsidiary
of Gazprombank, a Russian government majority-owned bank. Earlier this year, the
Russian Federation declared Morion to be in a "strategic industry." Russian
Federation regulations limit the ownership by foreign entities or non-Russian
investors in companies with a strategic industry designation. As a consequence,
Finproject, the Gazprombank subsidiary, acquired the majority interest in Morion
previously held by the European Bank for Reconstruction and Development and a
portion of the shares previously held by Frequency, both at the same price per
share. Frequency has received total proceeds of approximately $5.8 million. In
addition to approximately $1.9 million in equity income realized in prior
periods from the Morion investment, Frequency will recognize a pre-tax book gain
of approximately $3.1 million in the first quarter of fiscal year 2008, which
ends July 31, 2007.
Morion remains a very important strategic partner for Frequency. Morion will
continue to be a key supplier of high quality precision quartz resonators and
oscillators on a cost-effective basis. Frequency retains a level of ownership in
Morion appropriate for Frequency's relationship with this foreign
government-owned enterprise. Frequency continues to have representation on
Morion's board of directors and expects the strong business relationship with
Morion to grow and prosper. Commenting on this transaction, Martin Bloch, CEO of
Frequency, said, "We are looking forward to a highly rewarding future with
Morion. The transaction with Gazprombank has been accomplished in a fair and
professional manner. I believe this is a credit to the positive business
investment environment in Russia."
About Gazprombank
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Gazprombank is a Russian Federation majority-owned joint-stock bank. Gazprombank
renders banking services to the gas industry and to other industrial enterprises
and their employees. The bank's client base consists of approximately 2 million
retail clients and over 37,000 corporate clients, including 1,000 enterprises
and institutions of the gas industry. The Gazprombank regional network consists
of more than 300 outlets in 48 Russian regions.
About Frequency Electronics
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Frequency Electronics, Inc. is a world leader in the design, development and
manufacture of high precision timing, frequency control and synchronization
products for space and terrestrial applications. Frequency's products are used
in commercial, government and military systems, including satellite payloads,
missiles, UAVs, aircraft, GPS, secure radios, SCADA, energy exploration and
wireline and wireless communication networks. Frequency has received over 60
awards of excellence for achievements in providing high performance electronic
assemblies for over 120 space programs. The Company invests significant
resources in research and development and strategic acquisitions world-wide to
expand its capabilities and markets. Subsidiaries and Affiliates: Gillam-FEI
provides expertise in wireline network synchronization and SCADA; FEI-Zyfer
provides GPS and secure timing ("SAASM") capabilities for critical military and
commercial applications; FEI-Asia provides cost effective manufacturing and
distribution capabilities in a high growth market. Frequency's Morion affiliate
supplies high-quality, cost effective quartz oscillators and components. Elcom
Technologies provides added resources for state-of-the-art RF microwave
products. Additional information is available on the Company'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.
Contact information: Alan Miller, CFO, or General Joseph P. Franklin, Chairman:
TELEPHONE: (516) 794-4500 WEBSITE: www.frequencyelectronics.com
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