PART I [Business](index=4&type=section&id=Item%201.%20Business) Frequency Electronics, Inc. provides precision time and frequency generation systems for satellite, C4ISR, and EW, with 83% of FY2020 revenue from U.S. Government contracts - The company's core business is providing precision time and low phase noise frequency generation systems for space and challenging environments[15](index=15&type=chunk)[17](index=17&type=chunk) - Operations are divided into two segments: FEI-NY, accounting for **77% of FY2020 revenues**, and FEI-Zyfer, accounting for **26%**[21](index=21&type=chunk)[29](index=29&type=chunk)[30](index=30&type=chunk) - Consolidated backlog was approximately **$36 million** as of April 30, 2020, with **81%** expected to be filled in fiscal year 2021[44](index=44&type=chunk) - Sales to the U.S. Government or subcontracts for U.S. Government end-use constituted **83% of total sales in FY2020**[46](index=46&type=chunk)[47](index=47&type=chunk) | Category | FY 2020 | FY 2019 | | :--- | :--- | :--- | | **R&D Expenditure** | $5.1 million | $6.5 million | [Risk Factors](index=10&type=section&id=Item%201A.%20Risk%20Factors) This section is not applicable as the company qualifies as a smaller reporting company - This item is not required for smaller reporting companies[68](index=68&type=chunk) [Unresolved Staff Comments](index=10&type=section&id=Item%201B.%20Unresolved%20Staff%20Comments) The company has no unresolved comments from the SEC staff - Not Applicable[69](index=69&type=chunk) [Properties](index=10&type=section&id=Item%202.%20Properties) The company leases all primary operational facilities, including its headquarters in Long Island, NY, and sites in CA and NJ | Location | Size (sq. ft.) | Own or Lease | | :--- | :--- | :--- | | Long Island, NY | 93,000 | Lease | | Garden Grove, CA | 27,850 | Lease | | Northvale, NJ | 9,000 | Lease | - The lease for the main Long Island, NY facility was extended through **September 30, 2029**[71](index=71&type=chunk) [Legal Proceedings](index=11&type=section&id=Item%203.%20Legal%20Proceedings) The company is engaged in multiple legal disputes with a former Chief Scientist regarding wrongful termination, age discrimination, and deferred compensation claims - Martin B. Bloch, former Chief Scientist, filed a complaint alleging wrongful termination and age discrimination[74](index=74&type=chunk) - Mr. Bloch also initiated two arbitration proceedings claiming denial of benefits under deferred compensation agreements[75](index=75&type=chunk) - The company has filed a petition to stay arbitration, believing the claims are without merit, and intends to vigorously defend its position[74](index=74&type=chunk)[76](index=76&type=chunk)[77](index=77&type=chunk) [Mine Safety Disclosures](index=11&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This disclosure is not applicable to the company's operations - Not applicable[78](index=78&type=chunk) PART II [Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities](index=12&type=section&id=Item%205.%20Market%20for%20Registrant%27s%20Common%20Equity%2C%20Related%20Stockholder%20Matters%20and%20Issuer%20Purchases%20of%20Equity%20Securities) The company's common stock trades on Nasdaq under 'FEIM'; no dividends were paid in FY2020 or FY2019, and no shares were repurchased - The company's common stock is listed on The Nasdaq Global Market under the ticker symbol **"FEIM"**[81](index=81&type=chunk) - No dividends were declared or paid during fiscal years **2020 and 2019**, with an intention to retain future earnings[82](index=82&type=chunk) - The company did not repurchase any stock during fiscal years **2020 or 2019**, with approximately **$1 million** remaining authorized under its repurchase program[83](index=83&type=chunk) [Selected Financial Data](index=12&type=section&id=Item%206.%20Selected%20Financial%20Data) This section is not applicable as the company qualifies as a smaller reporting company - Not Applicable[84](index=84&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=12&type=section&id=Item%207.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) FY2020 revenues decreased **16% to $41.5 million**, gross margin fell to **13.9%**, and operating loss widened to **$10.9 million**, driven by lower revenues and higher engineering costs [Results of Operations](index=15&type=section&id=Results%20of%20Operations) FY2020 consolidated revenues decreased **16% to $41.5 million**, gross profit fell **63.6%**, and operating loss widened to **$10.9 million**, driven by lower revenues and higher engineering costs | Metric | FY 2020 (USD thousands) | FY 2019 (USD thousands) | Change (%) | | :--- | :--- | :--- | :--- | | **Revenues** | $41,507 | $49,509 | (16%) | | **Gross Profit** | $5,748 | $15,789 | (63.6%) | | **Gross Margin** | 13.9% | 31.9% | - | | **Operating Loss** | $(10,922) | $(2,817) | NM | | **Net Loss** | $(10,026) | $(2,529) | NM | - The decrease in gross profit and margin resulted from lower revenues and increased engineering costs on development-phase programs facing technical challenges[104](index=104&type=chunk) - The company recorded an income tax benefit of **$1.74 million** in FY2020, primarily due to the CARES Act allowing for net operating loss carryback[113](index=113&type=chunk) [Liquidity and Capital Resources](index=17&type=section&id=Liquidity%20and%20Capital%20Resources) The company maintained strong liquidity with **$38.3 million** in working capital and **$14.4 million** in cash at FY2020-end, despite **$1.4 million** net cash used in operations | Metric | April 30, 2020 (USD millions) | April 30, 2019 (USD millions) | | :--- | :--- | :--- | | **Working Capital** | $38.3 | $46.9 | | **Cash & Marketable Securities** | $14.4 | N/A | | **Current Ratio** | 3.9 to 1 | 9.0 to 1 | - Net cash used in operations was **$1.4 million** in FY2020, compared to **$0.1 million** in FY2019[115](index=115&type=chunk) - The company received a **$5.0 million** PPP loan in April 2020, which was fully repaid in May 2020[119](index=119&type=chunk)[308](index=308&type=chunk) - Management believes existing cash, marketable securities, and cash flows will provide sufficient liquidity for the next twelve months[121](index=121&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=19&type=section&id=Item%207A.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) This section is not applicable as the company qualifies as a smaller reporting company - Not applicable[134](index=134&type=chunk) [Financial Statements and Supplementary Data](index=19&type=section&id=Item%208.%20Financial%20Statements%20and%20Supplementary%20Data) This section presents the company's audited consolidated financial statements for FY2020 and FY2019, including balance sheets, statements of operations, cash flows, and comprehensive notes [Consolidated Financial Statements](index=22&type=section&id=Consolidated%20Financial%20Statements) FY2020 net loss was **$10.0 million** on **$41.5 million** revenues, with total assets of **$91.3 million**, liabilities of **$37.0 million**, and stockholders' equity of **$54.2 million** Key Financial Statement Data (USD thousands) | Account | April 30, 2020 | April 30, 2019 | | :--- | :--- | :--- | | **Total Assets** | $91,276 | $86,771 | | **Total Liabilities** | $37,040 | $23,682 | | **Total Stockholders' Equity** | $54,236 | $63,089 | | **Revenues (FY)** | $41,507 | $49,509 | | **Net Loss (FY)** | $(10,026) | $(2,529) | | **Net Cash Used in Operations (FY)** | $(1,407) | $(97) | [Notes to Consolidated Financial Statements](index=28&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) The notes detail accounting policies, including lease standard adoption, COVID-19 impact, CARES Act tax benefits, segment performance, and ongoing legal contingencies - The company adopted the new lease accounting standard (Topic 842) in FY2020, recognizing **$12.1 million** in lease liabilities and right-of-use assets[216](index=216&type=chunk)[128](index=128&type=chunk) - In FY2020, a **$1 million** reserve was recorded for a note receivable from the 2018 Gillam subsidiary sale; the FEI-Asia subsidiary sale in May 2019 resulted in a **$1 million** loss in FY2019[219](index=219&type=chunk)[220](index=220&type=chunk) - The company recorded an income tax benefit of **$1.74 million** in FY2020, primarily due to the CARES Act allowing for net operating loss carryback[273](index=273&type=chunk)[277](index=277&type=chunk)[279](index=279&type=chunk) Segment Operating Loss (FY 2020, USD thousands) | Segment | Operating Loss | | :--- | :--- | | FEI-NY | $(9,910) | | FEI-Zyfer | $(673) | | Corporate | $(339) | | **Consolidated Total** | **$(10,922)** | [Changes in and Disagreements with Accountants on Accounting and Financial Disclosure](index=50&type=section&id=Item%209.%20Changes%20in%20and%20Disagreements%20with%20Accountants%20on%20Accounting%20and%20Financial%20Disclosure) The company reported no disagreements with its accountants on accounting principles, financial disclosure, or auditing scope - None[310](index=310&type=chunk) [Controls and Procedures](index=50&type=section&id=Item%209A.%20Controls%20and%20Procedures) As of April 30, 2020, management concluded that both disclosure controls and internal control over financial reporting were effective - Management concluded that the company's disclosure controls and procedures were effective as of **April 30, 2020**[311](index=311&type=chunk) - Management assessed the company's internal control over financial reporting as effective as of **April 30, 2020**, based on the COSO framework[313](index=313&type=chunk) [Other Information](index=50&type=section&id=Item%209B.%20Other%20Information) There was no other information to be reported in this section - None[316](index=316&type=chunk) PART III Part III incorporates information by reference from the company's 2020 Proxy Statement, covering directors, executive officers, corporate governance, compensation, security ownership, and accountant fees [Directors, Executive Officers and Corporate Governance](index=51&type=section&id=Item%2010.%20Directors%2C%20Executive%20Officers%20and%20Corporate%20Governance) Information on directors, executive officers, corporate governance, and Section 16(a) compliance is incorporated by reference from the 2020 Proxy Statement - Information required by this item is incorporated by reference from the company's definitive proxy statement for the annual meeting of stockholders[319](index=319&type=chunk) [Executive Compensation](index=51&type=section&id=Item%2011.%20Executive%20Compensation) This information is incorporated by reference from the company's 2020 Proxy Statement - This item is incorporated by reference from the Company's 2020 Proxy Statement[320](index=320&type=chunk) [Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters](index=51&type=section&id=Item%2012.%20Security%20Ownership%20of%20Certain%20Beneficial%20Owners%20and%20Management%20and%20Related%20Stockholder%20Matters) This information is incorporated by reference from the company's 2020 Proxy Statement - This item is incorporated by reference from the Company's 2020 Proxy Statement[320](index=320&type=chunk) [Certain Relationships and Related Transactions, and Director Independence](index=51&type=section&id=Item%2013.%20Certain%20Relationships%20and%20Related%20Transactions%2C%20and%20Director%20Independence) This information is incorporated by reference from the company's 2020 Proxy Statement - This item is incorporated by reference from the Company's 2020 Proxy Statement[321](index=321&type=chunk) [Principal Accountant Fees and Services](index=51&type=section&id=Item%2014.%20Principal%20Accountant%20Fees%20and%20Services) This information is incorporated by reference from the company's 2020 Proxy Statement - This item is incorporated by reference from the Company's 2020 Proxy Statement[321](index=321&type=chunk) PART IV This final part lists the financial statements and exhibits filed as part of the annual report, including signatures of officers and directors [Exhibits and Financial Statement Schedules](index=52&type=section&id=Item%2015.%20Exhibits%20and%20Financial%20Statement%20Schedules) This section provides an index of financial statements and all exhibits filed with the Form 10-K, including corporate governance documents and certifications - Lists the financial statements and exhibits filed as part of the annual report[325](index=325&type=chunk) [Form 10-K Summary](index=55&type=section&id=Item%2016.%20Form%2010-K%20Summary) No summary is provided in this section - None[330](index=330&type=chunk)

Frequency Electronics, Inc. (NASDAQ:FEIM) Q4 2020 Earnings Conference Call July 16, 2020 4:30 PM ET Company Participants Stanton Sloane - President and Chief Executive Officer Steve Bernstein - Chief Financial Officer Conference Call Participants Brett Reiss - Janney Montgomery Scott Sam Rebotsky - SER Asset Management Michael Eister - Private Investor Kurt Caramanidis - Carl M. Hennig Company Operator Greetings. Welcome to the Frequency Electronics Fiscal Year 2020 Fourth Quarter and Year End Earnings Rele ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 Title of each class Trading Symbol Name of each exchange on which registered Common Stock (par value $1.00 per share) FEIM NASDAQ Global Market FORM 10-Q (Mark one) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Quarterly Period ended January 31, 2020 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from __________ t ...

Financial Data and Key Metrics Changes - For the nine months ending January 31, 2020, consolidated revenue was $31.3 million, down from $36.3 million in the prior fiscal year, while for the three months, revenue was $9.6 million compared to $13.2 million previously [10] - Gross margin for the nine months was $5.9 million with a margin rate of 18.9%, down from 34.1% in the prior year, and for the three months, gross margin was $3.1 million with a margin rate of 30.3%, compared to 31.1% previously [14] - The company recorded operating losses of $7.3 million for the nine months and $1.6 million for the three months, compared to losses of $540,000 and $394,000 in the prior year [19] Business Line Data and Key Metrics Changes - Revenue from commercial and U.S. government satellite programs was $14.7 million, down from $17.3 million, accounting for approximately 47% of consolidated revenue [11] - Revenue from non-space U.S. government and DOD customers was $12.7 million, down from $17.1 million, representing about 41% of consolidated revenue [12] - Other commercial industrial revenues increased to $3.9 million from $2 million in the prior fiscal year [13] Market Data and Key Metrics Changes - The company is pursuing new business opportunities valued at approximately $660 million, which is a significant increase and a strong leading indicator of future revenue growth [6] - The fully funded backlog at the end of January 2020 was approximately $36 million, down $4 million from the previous quarter, but the company received over $3.5 million in additional funding on two existing programs post-quarter [22] Company Strategy and Development Direction - The company has instituted best practices from aerospace experience to avoid past technical and financial issues [5] - There is a focus on organic growth, aiming to increase both top-line and bottom-line growth, with a goal to turn the $660 million in bids into $1 billion or $2 billion [36][37] - The company is investing significantly in R&D to enhance competitiveness and maintain product leadership in time and frequency technology [18] Management Comments on Operating Environment and Future Outlook - Management expressed optimism about the future, noting a renewed spirit within the company [7] - The company has taken precautions regarding the coronavirus, ensuring no disruptions in operations and supply chain [8] - Management indicated that predicting the timing of contract awards is difficult due to government negotiation cycles, but they are in a strong position as a supplier [30][33] Other Important Information - Selling and general administrative expenses increased significantly, accounting for approximately 35% of consolidated revenues for the three months, up from 20% in the prior year [16] - The company maintains a strong working capital position of approximately $40 million, debt-free, with a current ratio of over 6.1 to 1 [22] Q&A Session Summary Question: Can you quantify the additional professional fees and clarify the $725,000 charge? - The additional professional fees were a couple of hundred thousand dollars, and the $725,000 charge was related to the termination of a contract [25] Question: Is the $7.2 million backlog funded, and when can we expect contracts from the $660 million? - The $7.2 million is funded, and while timing is difficult to predict, management believes they are in a strong position for upcoming contracts [30] Question: What is the status of the GPS IIIF program? - The program is progressing well, and management is optimistic about its development [28] Question: When do you expect to report significant profit? - Management refrained from providing specific guidance but emphasized the importance of trends and organic growth [37] Question: What is Martin Bloch's current role? - Martin Bloch is currently a Director at the company [38] Question: Can you comment on the value of the two sole-sourced contracts? - Management did not provide specific values as the contracts are not yet definitized or negotiated [39] Question: What is the status of Elcom? - Elcom is performing well with new electronic warfare products and is awaiting low rate initial production [39]

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q (Mark one) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 or 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Quarterly Period ended October 31, 2019 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 or 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from __________ to __________ Commission File No. 1-8061 | --- | --- | --- | |--------------------------------------------------------------------------------- ...

Frequency Electronics, Inc. (NASDAQ:FEIM) Q2 2020 Results Conference Call December 12, 2019 4:30 PM ET Company Participants Martin Bloch - Executive Chairman Dr. Stan Sloane - CEO Steve Bernstein - CFO Conference Call Participants Brett Reiss - Janney Sam Rebotsky - SER Asset Management Operator Greetings and welcome to the Frequency Electronics Second Quarter Fiscal Year 2020 Earnings Release Conference Call. At this time, all participants are in a listen-only mode. A brief question-and-answer session will ...

Frequency Electronics, Inc. (NASDAQ:FEIM) Q1 2020 Earnings Conference Call September 16, 2019 4:30 PM ET Company Participants Martin Bloch - Chairman of the Board Stan Sloane - Chief Executive Officer Steve Bernstein - Chief Financial Officer Conference Call Participants Brett Reiss - Janney Montgomery Scott Sam Rebotsky - SER Asset Management Richard Jones - Private Investor Michael Eisner - Private Investor David Starkey - Morgan Stanley Michael Cooper - Private Investor Operator Greetings and welcome to ...

[Part I. Financial Information](index=3&type=section&id=Part%20I.%20Financial%20Information) This section presents the Company's unaudited condensed consolidated financial statements and management's analysis [Item 1. Financial Statements](index=4&type=section&id=Item%201%20-%20Financial%20Statements) This section presents the unaudited condensed consolidated financial statements for Frequency Electronics, Inc. and its subsidiaries, including balance sheets, statements of operations and comprehensive loss, cash flows, and changes in stockholders' equity, along with detailed notes explaining accounting policies and specific financial line items [Condensed Consolidated Balance Sheets](index=4&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) This table details the Company's financial position, including assets, liabilities, and stockholders' equity | Metric | July 31, 2019 (in thousands) | April 30, 2019 (in thousands) | | :--------------------------- | :--------------------------- | :---------------------------- | | Total Current Assets | $51,537 | $52,699 | | Total Assets | $95,164 | $86,771 | | Total Current Liabilities | $6,544 | $5,837 | | Total Liabilities | $32,328 | $23,682 | | Total Stockholders' Equity | $62,836 | $63,089 | [Condensed Consolidated Statements of Operations and Comprehensive Loss](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations%20and%20Comprehensive%20Loss) This table outlines the Company's revenues, expenses, and net loss or income over specified periods | Metric | Three Months Ended July 31, 2019 (in thousands) | Three Months Ended July 31, 2018 (in thousands) | | :----------------------------------- | :---------------------------------------------- | :---------------------------------------------- | | Revenues | $12,554 | $11,011 | | Gross Margin | $3,953 | $4,274 | | Operating (Loss) Income | $(780) | $85 | | Net (Loss) Income | $(591) | $31 | | Basic Net Loss Per Common Share | $(0.07) | $0.00 | | Diluted Net Loss Per Common Share | $(0.07) | $0.00 | | Comprehensive Loss | $(457) | $(13) | [Condensed Consolidated Statements of Cash Flows](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) This table details cash flows from operating, investing, and financing activities | Metric | Three Months Ended July 31, 2019 (in thousands) | Three Months Ended July 31, 2018 (in thousands) | | :----------------------------------------- | :---------------------------------------------- | :---------------------------------------------- | | Net Cash Provided by (Used in) Operating Activities | $153 | $(3,561) | | Net Cash Used in Investing Activities | $(1,597) | $(1,524) | | Net Cash Provided by Financing Activities | $0 | $0 | | Net Decrease in Cash and Cash Equivalents | $(1,444) | $(5,248) | | Cash and Cash Equivalents at End of Period | $2,239 | $2,621 | [Condensed Consolidated Statements of Changes in Stockholders' Equity](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Changes%20in%20Stockholders%27%20Equity) This table illustrates changes in the Company's stockholders' equity components | Metric | July 31, 2019 (in thousands) | April 30, 2019 (in thousands) | | :----------------------------------- | :--------------------------- | :---------------------------- | | Common Stock (Amount) | $9,164 | $9,164 | | Additional Paid-in Capital | $56,796 | $56,831 | | Accumulated Deficit | $(2,702) | $(2,111) | | Treasury Stock (at cost) | $(602) | $(841) | | Accumulated Other Comprehensive Income | $180 | $46 | | Total Stockholders' Equity | $62,836 | $63,089 | [Notes to Condensed Consolidated Financial Statements](index=8&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) These notes provide additional detail and context for the condensed consolidated financial statements, covering significant accounting policies, earnings per share calculations, contract revenue recognition, treasury stock activities, inventory valuation, lease accounting under ASU 2016-02, segment information, investment details, fair value measurements, and recent and newly adopted accounting pronouncements [NOTE A – CONDENSED CONSOLIDATED FINANCIAL STATEMENTS](index=8&type=section&id=NOTE%20A%20%E2%80%93%20CONDENSED%20CONSOLIDATED%20FINANCIAL%20STATEMENTS) Interim financial statements are unaudited, prepared under U.S. GAAP, and should be read with the annual report - The interim financial statements are unaudited and include normal recurring adjustments, prepared in accordance with U.S. GAAP, but with condensed disclosures. They should be read in conjunction with the Annual Report on Form 10-K for the year ended April 30, 2019[21](index=21&type=chunk) [NOTE B – EARNINGS PER SHARE](index=8&type=section&id=NOTE%20B%20%E2%80%93%20EARNINGS%20PER%20SHARE) This note details basic and diluted earnings per share calculations, including dilutive securities | Metric | Three Months Ended July 31, 2019 | Three Months Ended July 31, 2018 | | :------------------------------- | :------------------------------- | :------------------------------- | | Basic Weighted Average Shares Outstanding | 9,001,324 | 8,876,416 | | Diluted Weighted Average Shares Outstanding | 9,001,324 | 8,990,471 | - For the three months ended July 31, 2019, dilutive securities (**179,000 options**) were excluded from diluted EPS calculation because their inclusion would be antidilutive due to the net loss for the period[22](index=22&type=chunk) [NOTE C – COSTS AND ESTIMATED EARNINGS IN EXCESS OF BILLINGS, NET](index=8&type=section&id=NOTE%20C%20%E2%80%93%20COSTS%20AND%20ESTIMATED%20EARNINGS%20IN%20EXCESS%20OF%20BILLINGS%2C%20NET) This note explains revenue recognition for percentage of completion contracts and related net assets | Metric | July 31, 2019 (in thousands) | April 30, 2019 (in thousands) | | :----------------------------------------- | :--------------------------- | :---------------------------- | | Costs and Estimated Earnings in Excess of Billings | $9,464 | $8,278 | | Billings in Excess of Costs and Estimated Earnings | $(2,260) | $(1,608) | | Net Asset | $7,204 | $6,670 | - Revenue recognized under percentage of completion (POC) contracts was approximately **$11.5 million** for the three months ended July 31, 2019, compared to **$9.3 million** in the prior year. Contract losses of approximately **$314,000** were recorded for the three months ended July 31, 2019[23](index=23&type=chunk) [NOTE D – TREASURY STOCK TRANSACTIONS](index=8&type=section&id=NOTE%20D%20%E2%80%93%20TREASURY%20STOCK%20TRANSACTIONS) This note describes treasury stock activities, including contributions to employee plans - During the three months ended July 31, 2019, the Company contributed **10,906 shares** of common stock held in treasury to its 401(k) profit-sharing plan, as part of its discretionary match[24](index=24&type=chunk) [NOTE E – INVENTORIES](index=9&type=section&id=NOTE%20E%20%E2%80%93%20INVENTORIES) This note provides a breakdown of inventory categories and associated valuation reserves | Inventory Category | July 31, 2019 (in thousands) | April 30, 2019 (in thousands) | | :-------------------------- | :--------------------------- | :---------------------------- | | Raw Materials and Component Parts | $15,364 | $11,600 | | Work in Progress | $6,445 | $8,896 | | Finished Goods | $1,392 | $2,860 | | Total Inventories, Net | $23,201 | $23,356 | - Inventories are reported net of reserves of **$7.2 million** at July 31, 2019, and **$6.6 million** at April 30, 2019. All inventory was located in the United States[27](index=27&type=chunk) [NOTE F – RIGHT-OF-USE ASSETS AND LEASE LIABILITIES](index=9&type=section&id=NOTE%20F%20%E2%80%93%20RIGHT-OF-USE%20ASSETS%20AND%20LEASE%20LIABILITIES) This note details the adoption of new lease accounting standards and recognition of ROU assets and liabilities - Effective May 1, 2019, the Company adopted ASU 2016-02, recognizing **$12.1 million** in lease liabilities and corresponding ROU assets for operating leases on the balance sheet[29](index=29&type=chunk)[59](index=59&type=chunk) | Lease Metric | July 31, 2019 (in thousands) | | :--------------------------------- | :--------------------------- | | Operating Lease ROU Assets | $11,840 | | Current Operating Lease Liabilities | $1,883 | | Long-Term Operating Lease Liabilities | $10,193 | | Total Lease Liabilities | $12,076 | - Total operating lease expense for the three months ended July 31, 2019, was **$504,000**, primarily included in cost of revenues. The weighted-average remaining lease term was **8.9 years**, with a weighted average discount rate of **6.16%**[29](index=29&type=chunk)[34](index=34&type=chunk) [NOTE G – SEGMENT INFORMATION](index=11&type=section&id=NOTE%20G%20%E2%80%93%20SEGMENT%20INFORMATION) This note presents financial data for the Company's reportable segments, including revenues and operating profit - The Company operates in two reportable segments based on geographic location: FEI-NY (New York) and FEI-Zyfer (California)[35](index=35&type=chunk)[37](index=37&type=chunk) | Segment Performance (Three Months Ended July 31) | 2019 (in thousands) | 2018 (in thousands) | | :----------------------------------------------- | :------------------ | :------------------ | | FEI-NY Revenues | $9,010 | $8,577 | | FEI-Zyfer Revenues | $3,701 | $2,561 | | Consolidated Revenues | $12,554 | $11,011 | | FEI-NY Operating Profit | $(1,232) | $(215) | | FEI-Zyfer Operating Profit | $517 | $386 | | Consolidated Operating (Loss) Profit | $(780) | $85 | | Revenue by Product Line (Three Months Ended July 31) | 2019 (in thousands) | 2018 (in thousands) | | :--------------------------------------------------- | :------------------ | :------------------ | | Satellite Revenue | $3,895 | $5,534 | | Government Non-Space Revenue | $6,744 | $4,781 | | Other Commercial & Industrial Revenue | $1,915 | $696 | | Consolidated Revenues | $12,554 | $11,011 | [NOTE H – INVESTMENT IN MORION, INC.](index=13&type=section&id=NOTE%20H%20%E2%80%93%20INVESTMENT%20IN%20MORION%2C%20INC.) This note describes the investment in Morion, Inc., related transactions, and regulatory considerations - The Company holds a **4.6%** cost-basis investment in Morion, Inc., a privately-held Russian company[45](index=45&type=chunk) | Transaction with Morion (Three Months Ended July 31) | 2019 (approx.) | 2018 (approx.) | | :--------------------------------------------------- | :------------- | :------------- | | Product acquired from Morion | $245,000 | $68,000 | | Product/training services sold to Morion | $47,000 | $2,000 | | Dividend received from Morion | $125,000 | N/A | - Morion's parent company, Gazprombank, became subject to U.S. Department of Treasury financing prohibitions in July 2014[46](index=46&type=chunk) [NOTE I – FAIR VALUE OF FINANCIAL INSTRUMENTS](index=13&type=section&id=NOTE%20I%20%E2%80%93%20FAIR%20VALUE%20OF%20FINANCIAL%20INSTRUMENTS) This note outlines fair value measurement of financial instruments, primarily marketable securities | Fixed Income Securities | Cost (in thousands) | Gross Unrealized Gains (in thousands) | Gross Unrealized Losses (in thousands) | Fair Market Value (in thousands) | | :---------------------- | :------------------ | :------------------------------------ | :------------------------------------- | :------------------------------- | | July 31, 2019 | N/A | $182 | $(2) | $9,016 | | April 30, 2019 | N/A | $71 | $(24) | $8,199 | - All marketable securities are valued on a **Level 1** basis within the fair value hierarchy, indicating unadjusted quoted prices in active markets. The Company does not believe unrealized losses at July 31, 2019, were other-than-temporary[47](index=47&type=chunk)[54](index=54&type=chunk) - During the three months ended July 31, 2019, the Company sold or redeemed approximately **$750,000** of available-for-sale securities, realizing gains of approximately **$1,000**[48](index=48&type=chunk) [NOTE J – RECENT ACCOUNTING PRONOUNCEMENTS](index=14&type=section&id=NOTE%20J%20%E2%80%93%20RECENT%20ACCOUNTING%20PRONOUNCEMENTS) This note discusses the Company's evaluation and expected impact of recently issued accounting standards - The Company is evaluating ASU 2018-13 (Fair Value Measurement) and ASU 2016-13 (Credit Losses), both effective for fiscal years beginning after December 15, 2019 (fiscal year 2021), and expects to determine their effects[55](index=55&type=chunk)[57](index=57&type=chunk) - The Company will not early adopt ASU 2017-04 (Goodwill Impairment), effective for periods beginning after December 15, 2019, and expects it to have an immaterial effect[56](index=56&type=chunk) [Newly Adopted Accounting Standards](index=15&type=section&id=Newly%20Adopted%20Accounting%20Standards) This section details the adoption of ASU No. 2016-02 Leases (Topic 842) - In the first quarter of fiscal 2020, the Company adopted ASU No. 2016-02 Leases (Topic 842), recognizing **$12.1 million** in lease liabilities and corresponding ROU assets. A prospective application was elected, and prior periods remain under Topic 840[59](index=59&type=chunk) [NOTE K – CREDIT FACILITY](index=15&type=section&id=NOTE%20K%20%E2%80%93%20CREDIT%20FACILITY) This note provides information on the Company's available credit facility and its current utilization - As of July 31, 2019, the Company had an available credit facility with variable terms based on securities holdings, but no borrowings had been made[60](index=60&type=chunk) [NOTE L – VALUATION ALLOWANCE ON DEFERRED TAX ASSETS](index=15&type=section&id=NOTE%20L%20%E2%80%93%20VALUATION%20ALLOWANCE%20ON%20DEFERRED%20TAX%20ASSETS) This note explains the valuation allowance against deferred tax assets due to realization uncertainty - The Company maintained a full valuation allowance against its deferred tax assets as of July 31, 2019, and April 30, 2019, due to the assessment that it is more likely than not that these assets will not be realized[62](index=62&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=16&type=section&id=Item%202%20-%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides management's perspective on the Company's financial condition and results of operations, including critical accounting policies, revenue recognition, cost management, inventory valuation, marketable securities, and a detailed analysis of operating results, liquidity, and capital resources for the three months ended July 31, 2019, compared to the prior year [Critical Accounting Policies and Estimates](index=16&type=section&id=Critical%20Accounting%20Policies%20and%20Estimates) This section highlights the Company's most significant accounting policies and estimates - The most critical accounting policies are revenue and cost recognition on production contracts, income taxes, and inventory valuation, all requiring significant estimates[66](index=66&type=chunk) - Significant accounting policies remained unchanged during the three months ended July 31, 2019, except for those impacted by the newly adopted lease accounting standard[66](index=66&type=chunk) [Revenue Recognition](index=16&type=section&id=Revenue%20Recognition) This section describes the Company's methods for recognizing revenue from contracts - Revenue is recognized when performance obligations are satisfied, transferring goods or services to the customer. This occurs either as units with general specifications (Passage of Title - POT) or units with specific customer/government specifications (Percentage of Completion - POC)[67](index=67&type=chunk) - For larger, long-term fixed-price contracts (e.g., satellite programs), revenue is recognized using the cost-to-cost method under POC, with estimated contract costs reviewed monthly[68](index=68&type=chunk) - For production-type orders, revenue is recorded upon unit delivery. For FEI-Zyfer and smaller FEI-NY contracts, sales are recognized upon product shipment or service performance, unless customer acceptance is required[71](index=71&type=chunk)[72](index=72&type=chunk) [Costs and Expenses](index=17&type=section&id=Costs%20and%20Expenses) This section details contract cost components and accounting for selling, general, and administrative expenses - Contract costs include direct material, labor, manufacturing overhead, and other direct performance-related costs. Selling, general, and administrative costs are expensed as incurred, except for sales commissions with amortization periods over one year[73](index=73&type=chunk) [Inventory](index=17&type=section&id=Inventory) This section explains inventory valuation policies, including write-downs for obsolete items - Inventoried costs include amounts for long production cycle contracts. Write-downs are established for slow-moving, obsolete items, and costs on programs where production orders are not probable, based on management's experience and expectations[74](index=74&type=chunk) [Marketable Securities](index=17&type=section&id=Marketable%20Securities) This section describes marketable securities, their classification, and valuation methodology - All marketable securities are **Level 1**, trading on public markets with readily available prices. Investments are primarily in commercial paper of financially sound corporations or U.S. Government agency bonds/notes[75](index=75&type=chunk) - The Company believes its financial strength allows it to hold securities until recovery or maturity, deeming interim unrealized gains or losses as temporary[75](index=75&type=chunk) [Results of Operations](index=17&type=section&id=RESULTS%20OF%20OPERATIONS) The Company experienced increased revenues but a net loss for the three months ended July 31, 2019, primarily due to lower gross margin percentage and higher research and development costs, despite improvements in operating activities cash flow [Revenues](index=18&type=section&id=Revenues) This section provides an overview of revenues | Segment Revenues (Three Months Ended July 31) | 2019 (in thousands) | 2018 (in thousands) | Change (in thousands) | Change (%) | | :-------------------------------------------- | :------------------ | :------------------ | :-------------------- | :--------- | | FEI-NY | $9,010 | $8,577 | $433 | 5.1% | | FEI-Zyfer | $3,701 | $2,561 | $1,140 | 44.5% | | Intersegment revenues | $(157) | $(127) | $(30) | 23.6% | | Total Consolidated Revenues | $12,554 | $11,011 | $1,543 | 14.0% | - Revenues from non-space U.S. Government/DOD customers increased by **$2.0 million**, accounting for **54%** of consolidated revenues (up from **43%**). Satellite program revenues decreased by **$1.6 million**, representing **31%** of consolidated revenues (down from **50%**). Other commercial and industrial revenues increased to **$1.9 million** (**15%** of consolidated revenues) from **$700,000** (**7%**)[78](index=78&type=chunk) [Gross Margin](index=18&type=section&id=Gross%20Margin) This section provides an overview of gross margin | Metric (Three Months Ended July 31) | 2019 (in thousands) | 2018 (in thousands) | Change (in thousands) | Change (%) | | :---------------------------------- | :------------------ | :------------------ | :-------------------- | :--------- | | Gross Margin | $3,953 | $4,274 | $(321) | (7.5%) | | GM Rate | 31.5% | 38.8% | | | - The decrease in gross margin and GM Rate was primarily due to higher engineering costs incurred in several new programs involving state-of-the-art technology[80](index=80&type=chunk) [Selling and Administrative Expenses](index=18&type=section&id=Selling%20and%20Administrative%20Expenses) This section provides an overview of selling and administrative expenses | Metric (Three Months Ended July 31) | 2019 (in thousands) | 2018 (in thousands) | Change (in thousands) | Change (%) | | :---------------------------------- | :------------------ | :------------------ | :-------------------- | :--------- | | Selling and Administrative Expenses | $2,453 | $2,540 | $(87) | (3.4%) | - SG&A expenses decreased by **3.4%** and represented approximately **20%** of consolidated revenues in 2019, down from **23%** in 2018. No single account or expense type significantly contributed to the change[81](index=81&type=chunk) [Research and Development Expense](index=19&type=section&id=Research%20and%20Development%20Expense) This section provides an overview of research and development expense | Metric (Three Months Ended July 31) | 2019 (in thousands) | 2018 (in thousands) | Change (in thousands) | Change (%) | | :---------------------------------- | :------------------ | :------------------ | :-------------------- | :--------- | | Research and Development Expense | $2,280 | $1,649 | $631 | 38.3% | - R&D expenditures increased by **38.3%** and represented **18%** of sales in 2019, up from **15%** in 2018, reflecting investments in leading-edge time and frequency technology for future competitiveness and new opportunities[82](index=82&type=chunk)[84](index=84&type=chunk) [Operating (Loss) Income](index=19&type=section&id=Operating%20%28Loss%29%20Income) This section provides an overview of operating (loss) income | Metric (Three Months Ended July 31) | 2019 (in thousands) | 2018 (in thousands) | Change (in thousands) | | :---------------------------------- | :------------------ | :------------------ | :-------------------- | | Operating (Loss) Income | $(780) | $85 | $(865) | - The Company reported an operating loss of **$780,000** in 2019, a significant decrease from an operating income of **$85,000** in 2018, primarily due to lower gross margin percentage and increased R&D costs, despite improved revenues[85](index=85&type=chunk) [Other Income (Expense)](index=19&type=section&id=Other%20Income%20%28Expense%29) This section provides an overview of other income (expense) | Metric (Three Months Ended July 31) | 2019 (in thousands) | 2018 (in thousands) | Change (in thousands) | | :---------------------------------- | :------------------ | :------------------ | :-------------------- | | Investment Income | $177 | $45 | $132 | | Interest Expense | $(24) | $(18) | $(6) | | Other Income (Expense), Net | $56 | $(74) | $130 | | Total Other Income (Expense) | $209 | $(47) | $256 | - Investment income increased significantly, including a **$125,000** dividend from Morion. Other income also included a **$50,000** gain from the sale of a fixed asset[86](index=86&type=chunk) [Income Tax Provision](index=19&type=section&id=Income%20Tax%20Provision) This section provides an overview of income tax provision | Metric (Three Months Ended July 31) | 2019 (in thousands) | 2018 (in thousands) | Change (in thousands) | | :---------------------------------- | :------------------ | :------------------ | :-------------------- | | Income Tax Provision | $20 | $7 | $13 | | Effective Tax Rate on Pre-tax Book Income | (3.5)% | 18.4% | | - The effective tax rate for Q1 FY2020 was **(3.5)%** on a pretax loss, differing from the U.S. statutory rate primarily due to a discrete income tax provision for unrecognized tax benefits and unbenefited domestic losses. The estimated annual effective tax rate for FY2020 is **0%**[87](index=87&type=chunk)[89](index=89&type=chunk) [Liquidity and Capital Resources](index=20&type=section&id=LIQUIDITY%20AND%20CAPITAL%20RESOURCES) This section analyzes the Company's working capital, cash flows, and ability to meet financial obligations - The Company maintains a strong working capital position of **$44.9 million** at July 31, 2019, with a current ratio of **8.5 to 1**. Cash, cash equivalents, and marketable securities totaled **$11.3 million**[92](index=92&type=chunk) - Cash provided by operating activities was **$153,000** for the three months ended July 31, 2019, a significant improvement from **$3.6 million** cash used in the prior year, despite increased accounts receivable[93](index=93&type=chunk) - Net cash used in investing activities was **$1.6 million**, including **$912,000** for property, plant, and equipment. The Company has repurchased **$4 million** of common stock out of a **$5 million** authorization, with no repurchases in the current quarter[94](index=94&type=chunk)[96](index=96&type=chunk) - Consolidated funded backlog was approximately **$35 million** at July 31, 2019, with **85%** expected to be realized in the next twelve months. The Company believes its liquidity is adequate for the foreseeable future[98](index=98&type=chunk)[99](index=99&type=chunk) [Off-Balance Sheet Arrangements](index=20&type=section&id=Off-Balance%20Sheet%20Arrangements) This section discloses any material off-balance sheet arrangements other than operating leases - The Company has no material off-balance sheet arrangements other than operating leases[100](index=100&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=21&type=section&id=Item%203%20-%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) This section states that there are no applicable quantitative and qualitative disclosures about market risk for the Company - Not applicable[103](index=103&type=chunk) [Item 4. Controls and Procedures](index=21&type=section&id=Item%204%20-%20Controls%20and%20Procedures) Management, including the CEO and CFO, concluded that the Company's disclosure controls and procedures were effective as of July 31, 2019. There were no material changes in internal control over financial reporting during the period - The Company's disclosure controls and procedures were effective as of July 31, 2019, ensuring timely and accurate reporting[104](index=104&type=chunk) - No material changes in internal control over financial reporting occurred during the three months ended July 31, 2019[106](index=106&type=chunk) [Part II. Other Information](index=22&type=section&id=PART%20II.%20OTHER%20INFORMATION) This section includes required exhibits and signatures for the Form 10-Q filing [Item 6. Exhibits](index=22&type=section&id=Item%206%20-%20Exhibits) This section lists the exhibits filed with the Form 10-Q, including certifications by the CEO and CFO under Sections 302 and 906 of the Sarbanes-Oxley Act, and XBRL formatted financial statements - Includes certifications by CEO and CFO (Rule 13a-14(a) or 15d-14(a) and 18 U.S.C. Section 1350) and XBRL formatted financial statements[109](index=109&type=chunk) [Signatures](index=23&type=section&id=Signatures) This section contains the required signatures for the Form 10-Q, confirming its submission on behalf of Frequency Electronics, Inc - The report was signed by Steven L. Bernstein, Chief Financial Officer, Secretary, and Treasurer, on September 16, 2019[112](index=112&type=chunk)

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-K (Mark one) ☒ ANNUAL REPORT PURSUANT TO SECTION 13 or 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Fiscal Year ended April 30, 2019 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 or 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from __________ to __________ Commission File No. 1-8061 FREQUENCY ELECTRONICS, INC. (Exact name of Registrant as specified in its charter) Delaware 11-1986657 (State or ...

Frequency Electronics, Inc. (NASDAQ:FEIM) Q4 2019 Results Conference Call July 18, 2019 4:30 PM ET Company Participants Martin Bloch - Chairman of the Board Stan Sloane - Chief Executive Officer Steve Bernstein - Chief Financial Officer Conference Call Participants Sam Rebotsky - SER Asset Management George Marema - Pareto Ventures Brett Reiss - Janney Operator Good day, ladies and gentlemen. And welcome to you Frequency Electronics' Fourth Quarter and Year-End 2019 Earnings Release Conference Call [Operato ...