Frequency Electronics(FEIM)
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Frequency Electronics Announces First Quarter Fiscal 2025 Financial Results Conference Call: Tuesday, September 10, 2024, at 4:30 PM ET
GlobeNewswire News Room· 2024-09-06 16:17
MITCHEL FIELD, N.Y., Sept. 06, 2024 (GLOBE NEWSWIRE) -- Frequency Electronics, Inc. (NASDAQ: FEIM), will hold a conference call to discuss results for the first quarter of its fiscal year 2025, ended July 31, 2024, on Tuesday, September 10, 2024, at 4:30 PM Eastern Time. This call is being webcast by Issuer Direct Corporation and can be accessed in the Investor Relations section of Frequency's web site at www.freqelec.com. Investors and analysts may also access the call by dialing 888-506- 0062. Internation ...
Frequency Electronics(FEIM) - 2024 Q4 - Annual Report
2024-08-02 17:25
R&D and Innovation - The company expended $3.4 million in fiscal year 2024 and $3.1 million in fiscal year 2023 on R&D for satellite and terrestrial communication systems[31] - The Company engages in R&D activities to improve existing products and manufacturing processes, with costs expensed as incurred[170] - Research and development expenses increased slightly to $3.4 million in 2024, up 7.3% from $3.1 million in 2023[139] Revenue and Sales - Approximately 98% of the company's sales in fiscal 2024 and 95% in fiscal 2023 were derived from U.S. Government contracts or subcontracts[42] - 87% of the company's sales in fiscal 2024 were derived from fixed-price contracts, which carry higher financial risk[49] - The company's major customers include Lockheed Martin, Northrop Grumman, Office of Naval Research, and BAE Systems, each accounting for more than 10% of consolidated revenues in fiscal 2024[45] - Revenue increased to $55.3 million in 2024, up 35.6% from $40.8 million in 2023[139] - Consolidated revenues for the fiscal year ended April 30, 2024 were $55.3 million, compared to $40.8 million in 2023[169] - Consolidated revenues increased from $40.8 million in 2023 to $55.3 million in 2024, driven by growth in both FEI-NY and FEI-Zyfer segments[228] - FEI-NY segment revenues grew from $32.3 million in 2023 to $40.3 million in 2024, while FEI-Zyfer segment revenues increased from $9.9 million to $18.1 million over the same period[228] - Approximately 98% of the company's sales in 2024 were made under contracts to the U.S. Government or subcontracts for U.S. Government end-use, up from 95% in 2023[230] - Foreign sales increased from $1.2 million in 2023 to $2.1 million in 2024, representing a small portion of total revenues[234] Financial Performance - Gross margin improved significantly to $18.6 million in 2024, compared to $7.8 million in 2023, reflecting a 136.8% increase[139] - Net income turned positive at $5.6 million in 2024, a substantial improvement from a net loss of $5.5 million in 2023[139] - Operating income reached $5.0 million in 2024, reversing from an operating loss of $4.7 million in 2023[139] - Basic and diluted earnings per share were $0.59 in 2024, compared to a loss of $0.59 per share in 2023[139] - Operating income improved significantly, with FEI-NY reporting $2.4 million in 2024 compared to a loss of $4.2 million in 2023, and FEI-Zyfer reporting $3.3 million in 2024 versus a loss of $0.2 million in 2023[228] Cash Flow and Liquidity - The company's cash and cash equivalents increased to $18.32 million in 2024 from $12.05 million in 2023, reflecting a 52% growth[138] - Cash and cash equivalents increased to $19.3 million at the end of 2024, up 59.9% from $12.0 million in 2023[141] - Net cash provided by operating activities was $8.7 million in 2024, a 641.1% increase from $1.2 million in 2023[141] - The company declared a special cash dividend of $1.00 per share, totaling approximately $9.4 million based on current shares outstanding[238] Assets and Liabilities - Accounts receivable remained stable at $4.61 million in 2024 compared to $4.62 million in 2023[138] - Contract assets grew by 5% to $10.52 million in 2024 from $10.01 million in 2023[138] - Inventories increased by 14% to $23.43 million in 2024 from $20.53 million in 2023[138] - Total current assets rose by 20% to $58.12 million in 2024 from $48.31 million in 2023[138] - Contract liabilities increased by 16% to $21.64 million in 2024 from $18.59 million in 2023[138] - Total assets grew by 12% to $83.25 million in 2024 from $74.50 million in 2023[138] - The company's accumulated deficit improved to ($20.03 million) in 2024 from ($25.62 million) in 2023, a 22% reduction[138] - Total stockholders' equity increased to $39.8 million at the end of 2024, up 21.1% from $32.9 million in 2023[145] - Contract assets increased to $10.5 million in 2024 from $10.0 million in 2023, while contract liabilities increased to $21.6 million from $18.6 million[185] - Inventories increased to $23.4 million in 2024 from $20.5 million in 2023, with inventory reserves of $9.1 million and $8.1 million respectively[187] - Property, plant and equipment decreased to $6.4 million in 2024 from $7.1 million in 2023, with depreciation expense of $2.1 million and $2.4 million respectively[189] - Total operating lease liabilities decreased to $6.2 million in 2024 from $7.6 million in 2023, with total lease payments of $7.3 million over the next five years[191][193] - Accrued liabilities increased to $4.8 million in 2024 from $3.9 million in 2023, primarily due to higher incentive compensation[197] - Restricted cash as of April 30, 2024 was $945,000, related to a letter of credit for contractual restrictions, with no restricted cash in the prior fiscal year[200] Workforce and Compensation - The company employs 207 employees (200 full-time and 7 part-time) with high retention rates and increasing average length of service[37] - The company's workforce has an average tenure of 15 years and a median age of 53, raising concerns about potential retirements and challenges in attracting and retaining skilled replacements[58] - Stock-based compensation expense increased to $822,000 in 2024, up 317.3% from $197,000 in 2023[141] - The company contributed 58,987 and 61,897 shares of common stock to the profit-sharing plan in fiscal years 2024 and 2023, valued at $514,000 and $413,000 respectively[201] - The incentive bonus for the fiscal year ended April 30, 2024 was $489,000, compared to $175,000 in the prior fiscal year[202] - As of April 30, 2024, eligible employees and directors had been granted SARs representing approximately 2,385,000 shares, with 86,000 shares exercisable at a weighted average exercise price of $13.01[205] - Stock-based compensation costs for RSUs and PSUs included in cost of revenues were $487,000 and $186,000 for fiscal years 2024 and 2023 respectively[210] - Deferred compensation expense charged to selling and administrative expenses was $219,000 for fiscal year 2024, compared to $643,000 in the prior fiscal year[213] Risks and Challenges - The company faces competition from larger firms with greater financial resources and larger R&D and marketing staffs[33] - The company's products are technologically complex and require state-of-the-art technology and manufacturing expertise, with potential risks of system failure[52] - The company is dependent on numerous suppliers for parts, materials, and services, with potential risks of delays or failures in procurement[55] - The company's operating income can be adversely affected by increased estimated contract costs due to design issues, production challenges, and supplier issues[48] - The company faces significant supply chain risks, including potential disruptions from supplier quality issues, industry consolidation, and the need for alternate suppliers, which could result in increased costs and delays[56] - Global economic and geopolitical conditions, including inflation and recessionary pressures, could increase costs and reduce demand for the company's products[60] - Health epidemics and pandemics, such as COVID-19, could lead to workforce absenteeism, facility cleaning costs, and significant impacts on contract schedules and costs[62] - Cybersecurity attacks pose a significant risk, potentially leading to operational disruptions, intellectual property theft, and reputational damage[74] - The company's common stock has a relatively low trading volume of approximately 18,000 shares per day, which may limit shareholders' ability to sell shares at desired prices[76] - Approximately 43.6% of the company's outstanding common stock is held by 5 individuals or entities, and large sales by these holders could significantly depress the stock price[77] - The company maintains a comprehensive cybersecurity framework, including risk-based controls, incident response plans, and third-party assessments, to mitigate cybersecurity risks[79][80] Internal Controls and Financial Reporting - The company has identified a material weakness in internal control over financial reporting related to the calculation of loss provisions, which could result in future financial misstatements[68][69] - The company is implementing remediation plans to address the material weakness and aims to complete testing of remediated controls by April 30, 2025[71] - The company identified a material weakness in internal control over the calculation of loss provision accruals in customer contracts, which has been corrected but could impact future financial statements if not remediated[245] - The company's internal control over financial reporting was not effective as of April 30, 2024, due to the identified material weakness[244] - The company is actively remediating the material weakness by improving controls over loss provision accruals and implementing enhanced review and monitoring processes[247] - The company's disclosure controls and procedures were not effective at a reasonable assurance level as of April 30, 2024, due to the material weakness[241] - The company's management believes the audited consolidated financial statements fairly present the financial position, results of operations, and cash flows in conformity with GAAP, despite the material weakness[246] - The company has updated its method of calculating loss provision accruals to include previously recognized contract losses[247] - No changes in internal control over financial reporting, other than the identified material weakness, occurred during the fiscal quarter ended April 30, 2024[249] Investments and Marketable Securities - The company fully impaired its investment in Morion due to the Russia-Ukraine conflict and resulting sanctions[125] - No marketable securities were held during the fiscal year ended April 30, 2024, and all holdings related to marketable securities were liquidated in the fiscal year ended April 30, 2023[151] - The company liquidated all marketable securities holdings in fiscal year 2023, with proceeds of $10.97 million and gross realized losses of $784,000[194] - The company's investment in Morion, Inc. was written off in fiscal year 2022, with purchases from Morion decreasing to $89,000 in 2024 from $196,000 in 2023[198] Taxes and Deferred Tax Assets - The Company recognizes deferred tax liabilities and assets based on expected future tax consequences, using enacted tax rates[171] - The total income tax provision for fiscal year 2024 was a benefit of $130,000, compared to a provision of $74,000 in the prior fiscal year[215] - Total deferred tax asset decreased from $19.2 million in 2023 to $17.8 million in 2024, primarily due to a decrease in net operating loss carryforwards[218] - Valuation allowance decreased by approximately $1.1 million in 2024 compared to 2023, reflecting a reduction in net deferred tax assets[219] - The company has U.S. federal net operating losses of $24.2 million, with $8.5 million expiring between 2025 and 2038, and $15.7 million with an indefinite carry-forward period[220] Contracts and Revenue Recognition - Revenue recognition using the percentage-of-completion cost-to-cost method was identified as a critical audit matter due to significant estimates and assumptions[130] - Total revenue recognized over time using the POC method was approximately $52.1 million and $39.1 million for the years ended April 30, 2024 and 2023, respectively[168] - The company recognized $15.8 million of contract liabilities as revenue in fiscal year 2024, compared to $7.1 million in fiscal year 2023[186] - Total contract losses were $3.1 million in fiscal year 2024, up from $429,000 in fiscal year 2023[186] - The company recorded an out of period adjustment of $0.9 million, decreasing cost of revenues and loss provision accrual, with no impact on cash flows[182] Product Warranty and Legal Matters - Product warranty accrual increased from $529,000 in 2023 to $542,000 in 2024, reflecting changes in repair costs and sales levels[235] - The company was not involved in any litigation with probable unfavorable outcomes or material claims as of April 30, 2024[237] Other Financial Metrics - The company had no Accumulated Other Comprehensive Income (AOCI) as of April 30, 2024, and no change in AOCI during the fiscal year[236] - The cost of employee services received in exchange for equity awards is based on the grant-date fair value of the award[178] - The Company's fair value hierarchy prioritizes unadjusted quoted prices in active markets (Level 1) and unobservable inputs (Level 3)[176]
Frequency Electronics(FEIM) - 2024 Q4 - Earnings Call Transcript
2024-07-22 23:41
Question-and-Answer Session Operator Thomas McClelland Great, great. One more if I may and then I'll drop back in queue because I'm sure there's a line. This tremendous momentum and business opportunity going forward, what keeps you up at night that could, derail the continued taking advantage of the opportunity that lays before us? Brett Reiss Unidentified Analyst Good afternoon and thanks very much for the dollar and the great job you're doing. I just have one question. I'm wondering what the size of the ...
Frequency Electronics(FEIM) - 2024 Q4 - Annual Results
2024-07-22 20:24
Exhibit 99.1 PRESS RELEASE FEI President and CEO, Tom McClelland commented, "In fiscal year 2024 we experienced steady revenue growth of 8 – 10% quarter over quarter for the entire year, with revenue year over year up by 36%. Revenue for FY2024 was $55.3 million, up from $40.8 million in FY2023. Operating income improved meaningfully, and we believe profits and margins should continue to do so going forward; due to both our disciplined internal management as well as a fortified product offering. The backlog ...
Frequency Electronics, Inc. Announces Fourth Quarter and Full Fiscal Year 2024 Financial Results
GlobeNewswire News Room· 2024-07-22 20:18
FEI President and CEO, Tom McClelland commented, "In fiscal year 2024 we experienced steady revenue growth of 8 – 10% quarter over quarter for the entire year, with revenue year over year up by 36%. Revenue for FY2024 was $55.3 million, up from $40.8 million in FY2023. Operating income improved meaningfully, and we believe profits and margins should continue to do so going forward; due to both our disciplined internal management as well as a fortified product offering. The backlog of $78 million at the end ...
Frequency Electronics, Inc. Announces Fourth Quarter and Full Fiscal Year 2024 Financial Results
Newsfilter· 2024-07-22 20:18
MITCHEL FIELD, N.Y., July 22, 2024 (GLOBE NEWSWIRE) -- Mitchel Field, NY, July 22, 2024 – Frequency Electronics, Inc. ("FEI" or the "Company") (NASDAQ-FEIM) is reporting revenues for the three and twelve-month periods of fiscal year 2024, ended April 30, 2024, of approximately $15.6 million and $55.3 million, respectively, compared to revenues of $13.0 million and $40.8 million, respectively, for the same periods of fiscal year 2023, ended April 30, 2023. Operating income for the fourth quarter of fiscal ye ...
Frequency Electronics, Inc. Declares Special Cash Dividend of $1.00 Per Share
GlobeNewswire News Room· 2024-07-22 20:16
MITCHEL FIELD, N.Y., July 22, 2024 (GLOBE NEWSWIRE) -- Today the Board of Directors of Frequency Electronics, Inc. ("FEI" or the "Company") (NASDAQ-FEIM) declared a special cash dividend of $1.00 per share of common stock. The special dividend is payable on August 29, 2024, to stockholders of record as of the close of business on August 8, 2024. Based on the current number of shares outstanding, the total amount of the special dividend payment will be approximately $9.4 million. FEI President and CEO, Tom M ...
Frequency Electronics Announces Year End Fiscal 2024 Financial Results Conference Call: Monday, July 22, 2024, at 4:30 PM ET
Newsfilter· 2024-07-19 17:51
MITCHEL FIELD, N.Y., July 19, 2024 (GLOBE NEWSWIRE) -- Frequency Electronics, Inc. (NASDAQ: FEIM), will hold a conference call to discuss results for its fiscal year 2024, ended April 30, 2024, on Monday, July 22, 2024, at 4:30 PM Eastern Time. Frequency's Mission Statement: "Our mission is to provide precision time and low phase noise frequency generation systems from 1 Hz to 50 GHz, for space and other challenging environments." A telephone replay of the archived call will be available at 877-481-4010 (do ...
Frequency Electronics Announces Year End Fiscal 2024 Financial Results Conference Call: Monday, July 22, 2024, at 4:30 PM ET
GlobeNewswire News Room· 2024-07-19 17:51
This call is being webcast by Issuer Direct Corporation and can be accessed in the Investor Relations section of Frequency's web site at www.freqelec.com. Investors and analysts may also access the call by dialing 888-506- 0062. International callers may dial 973-528-0011. Callers should provide participant access code: 233739 or ask for the Frequency Electronics conference call. Frequency Electronics, Inc. is a world leader in the design, development and manufacture of high precision timing, frequency gene ...
Zacks Initiates Coverage of Frequency Electronics With Outperform Recommendation
ZACKS· 2024-06-11 13:00
The company is strategically positioned in markets with high barriers to entry, such as precision time and frequency control products that are essential for defense and communication technologies. This niche market positioning is crucial for securing long-term contracts and stable revenue streams, as highlighted by the research report. As of Jan 31, 2024, Frequency Electronics reported a strong liquidity position with cash and cash equivalents of $11.7 million. This robust cash position provides financial f ...