Core Insights - Frequency Electronics, Inc. (FEIM) specializes in precision time and frequency control products, essential for telecommunications, space, and defense industries [1] - The company reported a first-quarter EPS of $0.07, significantly below the estimated $0.36, indicating a decrease in net income from operations [2][6] - FEIM's revenue for the quarter was $13.81 million, missing the anticipated $16.5 million and down from $15.1 million in the previous year [3][6] Financial Performance - The net income from operations decreased to $0.6 million compared to $2.4 million in the previous year [2] - Operating income fell to $0.4 million from $2.4 million in the prior year due to declining revenue [3] - Despite these challenges, the company generated a positive cash flow of $1.2 million from operating activities [2] Strategic Initiatives - FEIM has authorized a $20 million share repurchase program, reflecting confidence in its long-term prospects despite current financial difficulties [3][6] Financial Ratios - The company has a price-to-earnings (P/E) ratio of approximately 13.96, indicating investor willingness to pay $13.96 for every dollar of earnings [4] - The price-to-sales ratio is about 4.79, and the enterprise value to sales ratio is around 4.84, reflecting market valuation of the company's revenue [4] - FEIM maintains a low debt-to-equity ratio of 0.16, indicating conservative use of debt, and a current ratio of 2.26, suggesting strong short-term financial health [5] Investment Metrics - The enterprise value to operating cash flow ratio is high at 54.47, while the earnings yield is approximately 7.16%, providing insight into the return on investment for shareholders [5]

Financial Data and Key Metrics Changes - For the three months ending July 31, 2025, consolidated revenue was $13.8 million, a decrease from $15.1 million in the same period of the prior fiscal year [4] - Consolidated net income for the same period was approximately $634,000, or $0.07 per share, compared to approximately $2.4 million, or $0.25 per share for the same period of the prior fiscal year [5] - The company's operating income decreased to approximately $364,000 from approximately $2.4 million in the prior fiscal year due to lower revenue and gross margin [5] Business Line Data and Key Metrics Changes - Revenue from commercial and U.S. government satellite programs was approximately $6.5 million, or 47%, compared to $8.3 million, or 55%, in the same period of the prior fiscal year [4] - Revenues from non-space U.S. government and DOD customers were $6.9 million, an increase from $6.3 million in the same period of the prior fiscal year, accounting for approximately 50% of consolidated revenues compared to 42% for the prior fiscal year [4] - Other commercial and industrial revenues were approximately $439,000, down from approximately $544,000 in the prior fiscal year [4] Market Data and Key Metrics Changes - The fully funded backlog at the end of July 2025 was approximately $71 million, compared to approximately $70 million for the previous fiscal year ended April 30, 2025 [5] - The company maintains a strong working capital position of approximately $30 million at July 31, 2025, with a current ratio of approximately 2.3 to 1 [5] Company Strategy and Development Direction - The company is focused on investing in growth for the future, particularly in quantum sensing and defense technologies [2][3] - A new engineering facility was opened in Boulder, Colorado, to support ongoing programs and new technology efforts, with expectations for positive contributions to the bottom line by the third quarter of the fiscal year [3] - The company is actively bidding on new programs, anticipating meaningful new business opportunities in the near term, particularly in space and defense sectors [2][3] Management's Comments on Operating Environment and Future Outlook - Management noted that customer-driven delays in key programs affected revenue recognition in the first quarter, but these issues are now resolved, and significant progress is being made [2] - The company remains confident in its strong fundamentals and future growth potential, despite a temporary decline in revenue and earnings [3] - Management emphasized the importance of their technologies in addressing vulnerabilities in global timing systems, which are increasingly critical in the defense landscape [3] Other Important Information - The company announced a $20 million authorization for share repurchase, reflecting its commitment to returning cash to shareholders while investing in future growth [3] - The company is pursuing external government funding for research and development, particularly in quantum sensing, which is seen as a large emerging market [3] Q&A Session Summary Question: Update on various clock technologies and timelines for productization - Management confirmed that atomic clocks are available off the shelf and that prototypes for advanced technologies like the Mercury Ion atomic clock are being produced in collaboration with the Jet Propulsion Laboratory, with low-rate production expected in about a year [8][10] Question: Interest in applying quantum sensing technology outside of space applications - Management stated that while they are not directly investing in quantum computing, they are aware of its developments and are focusing on quantum sensing technologies that can be quickly applied [11][12]

Financial Data and Key Metrics Changes - For the three months ending July 31, 2025, consolidated revenue was $13.8 million, down from $15.1 million in the same period of the prior fiscal year, reflecting a decrease of approximately 8.6% [4] - Consolidated net income for the same period was approximately $634,000, or $0.07 per share, compared to approximately $2.4 million, or $0.25 per share for the same period of the prior fiscal year, indicating a significant decline in profitability [5] - The company's operating income decreased to approximately $364,000 from approximately $2.4 million in the prior fiscal year, primarily due to lower revenue and gross margin [5] Business Line Data and Key Metrics Changes - Revenue from commercial and U.S. government satellite programs was approximately $6.5 million, or 47% of total revenue, down from $8.3 million, or 55% in the prior fiscal year [4] - Revenues from non-space U.S. government and DOD customers increased to $6.9 million from $6.3 million, accounting for approximately 50% of consolidated revenues compared to 42% in the prior fiscal year [4] - Other commercial and industrial revenues decreased to approximately $439,000 from approximately $544,000 in the prior fiscal year [4] Market Data and Key Metrics Changes - The fully funded backlog at the end of July 2025 was approximately $71 million, slightly up from approximately $70 million for the previous fiscal year ended April 30, 2025, indicating stable demand [5] - The company maintains a strong working capital position of approximately $30 million and a current ratio of approximately 2.3 to 1, reflecting solid financial health [5] Company Strategy and Development Direction - The company is focused on expanding its capabilities in quantum sensing and has opened a new engineering facility in Boulder, Colorado, to support this initiative [3] - The company is actively bidding on new programs, anticipating meaningful new business opportunities, particularly in defense and space sectors [2] - The company plans to continue investing in R&D to keep its products at the state-of-the-art, despite a temporary decline in revenue and earnings [3][5] Management's Comments on Operating Environment and Future Outlook - Management noted that customer-driven delays impacted revenue recognition in the first quarter, but these issues are now resolved, and significant progress is being made towards a larger book of business [2] - The company expressed confidence in its future growth, citing a debt-free balance sheet and a commitment to returning cash to shareholders while investing in innovation [3] - Management highlighted the increasing global demand for resilient timing solutions, validating the company's strategic importance in the defense sector [3] Other Important Information - The company announced a $20 million authorization for share repurchase, demonstrating its commitment to returning value to shareholders [3] - The company is pursuing external government funding for R&D, particularly in quantum sensing, which is seen as a large emerging market [3] Q&A Session Summary Question: Update on various clock technologies and timelines for productization - The company is actively producing satellite-grade GPS atomic clocks and has begun producing prototypes of the Mercury Ion atomic clock in collaboration with the Jet Propulsion Laboratory, with low-rate production expected in about a year [10] Question: Interest in applying quantum sensing technology outside of space - The company is not currently investing directly in quantum computing but is aware of its potential applications and is building a workforce to support future contributions in this area [12]

Financial Data and Key Metrics Changes - For the three months ending July 31, 2025, consolidated revenue was $13.8 million, down from $15.1 million for the same period in the prior fiscal year, indicating a decrease of approximately 8.6% [12] - Consolidated net income for the same period was approximately $634,000, or $0.07 per share, compared to approximately $2.4 million, or $0.25 per share for the same period of the prior fiscal year, reflecting a significant decline in profitability [17] - The company's fully funded backlog at the end of July 2025 was approximately $71 million, slightly up from approximately $70 million for the previous fiscal year ended April 30, 2025 [17] Business Line Data and Key Metrics Changes - Revenue from commercial and U.S. government satellite programs was approximately $6.5 million, or 47% of total revenue, down from $8.3 million, or 55%, in the same period of the prior fiscal year [12] - Revenues from non-space U.S. government and DOD customers were $6.9 million, up from $6.3 million in the same period of the prior fiscal year, accounting for approximately 50% of consolidated revenues compared to 42% for the prior fiscal year [13] - Other commercial and industrial revenues decreased to approximately $439,000 from approximately $544,000 in the prior fiscal year [13] Market Data and Key Metrics Changes - The company noted that customer-driven delays on key programs pushed revenue recognition out of the fiscal first quarter, but these delays are not expected to result in overall program revenue reductions [4] - The company is actively bidding on new programs, with expectations of meaningful new business in the near term, particularly in space and defense markets [5][6] Company Strategy and Development Direction - The company has transformed into a larger, more profitable, and cash-generative entity that invests in future growth while rewarding shareholders [5] - The recent opening of an engineering facility in Boulder, Colorado, aims to support ongoing programs and new technology efforts, particularly in quantum sensing [6] - The company is pursuing external government funding for research and development, especially in quantum sensing, which is identified as a large emerging market [7] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence that the issues faced in the first quarter related to customer-led delays are now resolved, with significant progress being made towards a larger book of business [4] - The company maintains a debt-free balance sheet and a strong working capital position, indicating confidence in its liquidity to meet operational needs [9][17] - Management highlighted the increasing global focus on resilient timing technologies, validating the company's strategic importance in the defense sector [11] Other Important Information - The company announced a $20 million authorization for share repurchase, demonstrating its commitment to returning cash to shareholders while investing in future growth [10] - The company plans to host its second annual Quantum Sensing Summit in New York City, aimed at exploring emerging technologies and reinforcing its strategic role in advancing quantum technology [7] Q&A Session Summary Question: Update on various clock technologies and timelines for productization - Management confirmed that atomic clocks are available off the shelf, with prototypes of the Mercury Ion atomic clock being produced in collaboration with the Jet Propulsion Laboratory, expected for low-rate production in about a year [20][21] Question: Interest in applying quantum sensing technology outside of space applications - Management stated that while they are not directly investing in quantum computing, they are aware of its developments and are focusing on quantum sensing technologies that can contribute quickly [23][25]

[Press Release Overview](index=1&type=section&id=Press%20Release%20Overview) This section provides an overview of Frequency Electronics' Q1 FY2026 financial results and the newly authorized share repurchase program [Headline and Introduction](index=1&type=section&id=Headline%20and%20Introduction) Frequency Electronics, Inc. announced its financial results for the first quarter of fiscal year 2026 and authorized a new $20 million share repurchase program - Frequency Electronics, Inc. announced its financial results for the first quarter of fiscal year 2026[3](index=3&type=chunk) - The Company announced a **$20 million share repurchase authorization**[2](index=2&type=chunk)[8](index=8&type=chunk) [Key Financial Highlights (Q1 FY2026 vs Q1 FY2025)](index=1&type=section&id=Key%20Financial%20Highlights%20%28Q1%20FY2026%20vs%20Q1%20FY2025%29) For the first quarter of fiscal year 2026, Frequency Electronics experienced declines in revenue, operating income, and net income compared to the prior year, but saw a significant improvement in net cash provided by operating activities and a slight increase in backlog Q1 FY2026 vs Q1 FY2025 Financial Summary (in millions) | Metric | Q1 FY2026 (approx.) | Q1 FY2025 | Change | | :--------------------------------- | :------------------ | :------------------ | :------------------ | | Revenue | $13.8 | $15.1 | -$1.3 | | Operating Income | $0.4 | $2.4 | -$2.0 | | Net Income from operations | $0.6 | $2.4 | -$1.8 | | Diluted EPS | $0.07 | $0.25 | -$0.18 | | Net cash from operating activities | $1.2 (provided) | $1.5 (used) | +$2.7 | | Backlog (as of July 31, 2025) | $71 | $70 (as of April 30, 2025) | +$1 | [Management Commentary and Business Outlook](index=1&type=section&id=Management%20Commentary%20and%20Business%20Outlook) This section details management's analysis of Q1 FY2026 performance, strategic initiatives for future growth, and commitment to shareholder returns [Q1 FY2026 Performance Analysis](index=1&type=section&id=Q1%20FY2026%20Performance%20Analysis) CEO Tom McClelland attributed the Q1 FY2026 revenue and operating income declines to timing issues, including revenue pulled forward into Q4 FY2025 and customer-driven delays on key programs, emphasizing these are not cancellations and the underlying business fundamentals remain strong - Q1 FY2026 results reflect declines in revenue and operating income compared to both Q1 FY2025 and Q4 FY2025, primarily due to timing issues[5](index=5&type=chunk) - Declines were impacted by revenue booked in Q4 FY2025 that was previously expected in FY2026, and customer-driven delays on key programs, which are not cancellations[5](index=5&type=chunk) - The underlying fundamentals of the business remain **strong**, with an extremely encouraging overall outlook and confidence in an upward trajectory despite non-linear growth[5](index=5&type=chunk) [Strategic Initiatives and Future Growth](index=1&type=section&id=Strategic%20Initiatives%20and%20Future%20Growth) The company maintains a historically high backlog, is actively pursuing significant new programs in defense markets, and is investing in quantum sensing through a new Boulder facility and government R&D funding, with expectations for positive contributions by Q3 FY2026 - Backlog remains at a **historically high level ($71 million)**, indicating future success[6](index=6&type=chunk) - Actively bidding on new programs, some significantly larger than typical contract wins, with follow-on potential over the next decade in space and non-space defense markets[6](index=6&type=chunk) - Opened an engineering facility in Boulder, Colorado, and hired senior scientists to support new initiatives in quantum sensing, anticipating positive bottom-line contributions by **Q3 FY2026**[6](index=6&type=chunk) - Pursuing external government funding for research and development, particularly in the large emerging market of quantum sensing[6](index=6&type=chunk) - Will host its second annual Quantum Sensing Summit in New York City in October to explore emerging technologies and reinforce leadership[7](index=7&type=chunk) [Shareholder Return and Financial Strength](index=1&type=section&id=Shareholder%20Return%20and%20Financial%20Strength) FEI highlights its strong fundamentals, profitability in core technologies, and innovation investments, supported by a debt-free balance sheet. The company authorized a $20 million share repurchase program, equivalent to its last two special dividends, to return cash to shareholders and allow future value gains to accrue to equity holders - Strong fundamentals remain unchanged, with continued profitability in core technologies and active investment in innovation for long-term growth[8](index=8&type=chunk) - Maintains a **debt-free balance sheet** and leadership in position, navigation, and timing (PNT) in the industry[8](index=8&type=chunk) - Authorized a **$20 million share repurchase program**, reflecting balance sheet strength and belief in the company's outlook, and serving as an effective tool for rewarding shareholders[8](index=8&type=chunk) [Company Information](index=2&type=section&id=Company%20Information) This section provides an overview of Frequency Electronics' business, its mission, and details regarding investor relations and legal disclosures [About Frequency Electronics](index=3&type=section&id=About%20Frequency%20Electronics) Frequency Electronics, Inc. (FEI) is a global leader in high-precision timing, frequency generation, and RF control products for space and terrestrial applications, serving commercial, government, and military sectors. The company is committed to transforming research discoveries into practical products and investing significantly in R&D - FEI is a world leader in the design, development, and manufacture of high precision timing, frequency generation, and RF control products for space and terrestrial applications[11](index=11&type=chunk) - Products are used in satellite payloads and various commercial, government, and military systems, including C4ISR, electronic warfare, missiles, UAVs, and GPS[11](index=11&type=chunk) - The company's mission is to transform research discoveries into practical, real-world products, building on a legacy of delivering unique precision time and frequency generation products[12](index=12&type=chunk) - FEI invests significant resources in research and development to expand its capabilities and markets[11](index=11&type=chunk) [Investor Relations and Legal Disclosures](index=2&type=section&id=Investor%20Relations%20and%20Legal%20Disclosures) The press release provides details for an upcoming investor conference call, refers to an 8-K filing for additional information, and includes standard forward-looking statements with associated risks and disclaimers - An investor conference call is scheduled for **Thursday, September 11, 2025, at 4:30 PM Eastern Time** to discuss the results[10](index=10&type=chunk) - Further information can be found in the **8-K filed after market close**[9](index=9&type=chunk) - The press release contains forward-looking statements subject to inherent risks and uncertainties, and investors should not rely on them as predictions of actual results[13](index=13&type=chunk) [Financial Statements](index=4&type=section&id=Financial%20Statements) This section presents the condensed consolidated statements of operations and balance sheets for Frequency Electronics [Condensed Consolidated Statements of Operations](index=4&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) For the three months ended July 31, 2025, Frequency Electronics reported a decrease in revenues, gross margin, operating income, and net income compared to the same period in 2024 Condensed Consolidated Statements of Operations (Three Months Ended July 31, in thousands) | Metric | 2025 | 2024 | Change | | :-------------------- | :--- | :--- | :--- | | Revenues | $13,812 | $15,077 | -$1,265 | | Cost of revenues | $8,730 | $8,379 | +$351 | | Gross margin | $5,082 | $6,698 | -$1,616 | | Selling and administrative | $3,585 | $2,845 | +$740 | | Research and development | $1,133 | $1,488 | -$355 | | Operating income | $364 | $2,365 | -$2,001 | | Income before Income Taxes | $557 | $2,563 | -$2,006 | | Net income | $634 | $2,430 | -$1,796 | | Basic and diluted income per share | $0.07 | $0.25 | -$0.18 | | Weighted average shares outstanding (Basic and diluted) | 9,723 | 9,538 | +185 | [Condensed Consolidated Balance Sheets](index=5&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) As of July 31, 2025, total assets slightly decreased compared to April 30, 2025, primarily due to lower cash and contract assets, while inventories and accounts receivable increased. Stockholders' equity saw a modest increase Condensed Consolidated Balance Sheets (as of July 31, 2025 vs April 30, 2025, in thousands) | Asset/Liability | July 31, 2025 | April 30, 2025 | Change | | :----------------------------- | :------------ | :------------- | :----- | | Cash and cash equivalents | $4,512 | $4,720 | -$208 | | Accounts receivable, net | $7,440 | $5,914 | +$1,526 | | Contract assets | $14,213 | $17,914 | -$3,701 | | Inventories, net | $24,772 | $23,487 | +$1,285 | | Total Assets | $93,203 | $93,737 | -$534 | | Contract liabilities | $13,105 | $13,454 | -$349 | | Stockholders' equity | $56,319 | $55,620 | +$699 |

Financial Performance - Revenue for the first quarter of fiscal year 2026 was approximately $13.8 million, a decrease from $15.1 million in the same period of fiscal year 2025, representing a decline of about 8.6% [3] - Operating income for the first quarter was $0.4 million, significantly down from $2.4 million in the same period of the previous fiscal year, indicating a decline of approximately 83.3% [3] - Net income from operations was $0.6 million or $0.07 per diluted share, compared to $2.4 million or $0.25 per diluted share for the first quarter of fiscal year 2025 [3] - Net cash provided by operating activities was approximately $1.2 million, a turnaround from net cash used in operations of $1.5 million for the same period of fiscal year 2025 [3] Business Outlook - The company’s backlog at July 31, 2025, was approximately $71 million, slightly up from $70 million at April 30, 2025, indicating stable demand [3] - The CEO noted that the decline in revenue and operating income was attributed to timing issues and customer-driven delays, not cancellations or contract reductions, with expectations for future revenue growth from these programs [4][5] - The company is actively bidding on new programs, some of which are significantly larger than previous contracts, with potential follow-on business over the next decade [5] Strategic Initiatives - The company opened a new engineering facility in Boulder, Colorado, to support ongoing programs and new technology efforts, with expectations for positive contributions to the bottom line by the third quarter of the fiscal year [5] - The company is pursuing external government funding for research and development, particularly in the area of quantum sensing, which is identified as a large emerging market [5] - The company will host its second annual Quantum Sensing Summit in October 2025, aimed at exploring emerging technologies and reinforcing its strategic role in advancing this field [6] Shareholder Returns - The company announced a $20 million share repurchase authorization, reflecting its commitment to returning cash to shareholders while funding growth in next-generation opportunities [8]

Market Overview - The S&P 500 Index reached a new record high, while the Nasdaq 100 hit a 4-week high, indicating a positive market sentiment [2] - Stocks are supported by a decline in bond yields following a surprising easing in US producer prices for August, which has strengthened expectations for Federal Reserve interest rate cuts [2][9] Company Highlights - Oracle's stock surged by +42% to a record high after the company provided an aggressive outlook for its cloud business, driven by strong demand for AI infrastructure [3][13] - CoreWeave, Broadcom, Arista Networks, Nvidia, Super Micro Computer, and Advanced Micro Devices also saw significant gains, reflecting a rally in AI computing infrastructure stocks [14] - Travere Therapeutics rose by +27% after receiving positive news regarding its supplemental drug application for a rare kidney disorder [16] - GameStop reported Q2 hardware and accessories net sales of $592.1 million, exceeding expectations, leading to a +5% increase in its stock [16] - Johnson Controls International raised its quarterly cash dividend to 40 cents per share, above market expectations, resulting in a +3% increase in its stock [17] Economic Indicators - US MBA mortgage applications increased by +9.2% in the week ending September 5, with the average 30-year fixed mortgage rate falling to an 11-month low of 6.49% [5] - The final-demand PPI for August eased to +2.6% year-on-year, lower than the previous month's +3.1% and below market expectations [5] - China's August CPI fell by -0.4% year-on-year, marking the steepest decline in six months, while the PPI fell by -2.9% year-on-year, indicating ongoing deflationary pressures [4] Stock Movements - Apple shares fell by more than -2% due to market disappointment over the latest product launches [4][19] - Synopsys experienced a significant drop of more than -34% after forecasting lower-than-expected full-year adjusted EPS [17] - Humana's stock declined by more than -2% following concerns about changes in Medicare quality ratings affecting revenue [17]

Market Overview - The S&P 500 Index reached a new record high, while the Nasdaq 100 hit a 4-week high, indicating a positive market sentiment [2] - Stocks are supported by a 37% surge in Oracle, which provided an aggressive outlook for its cloud business driven by AI infrastructure demand [3][12] - The 10-year T-note yield decreased to 4.06%, reflecting easing bond yields after US producer prices for August unexpectedly fell [2][8] Economic Indicators - US MBA mortgage applications increased by 9.2% in the week ending September 5, with the average 30-year fixed mortgage rate dropping to 6.49%, the lowest in 11 months [4] - The final-demand PPI for August eased to 2.6% year-on-year, lower than expectations, indicating a potential easing of inflationary pressures [4] Company Performance - Oracle's forecast for cloud infrastructure revenue is projected to reach $32 billion, $73 billion, $114 billion, and $114 billion over the next four years, highlighting strong growth expectations [12] - Other AI-related stocks such as CoreWeave, Broadcom, Nvidia, Arista Networks, and Advanced Micro Devices also experienced significant gains, reflecting a broader rally in AI infrastructure stocks [13][14] Geopolitical and Global Economic Factors - Geopolitical tensions escalated in Europe following Poland's actions against drones, which may impact market stability [3] - Ongoing deflation signs in China, with August CPI falling by 0.4% year-on-year, raise concerns about China's economic outlook and global growth prospects [3] Future Market Expectations - Markets are pricing in a 100% chance of a 25 basis point rate cut at the upcoming FOMC meeting, with expectations for further cuts by year-end [6] - Upcoming economic data releases, including the US August CPI and consumer sentiment index, are anticipated to influence market direction [5]

The S&P 500 Index ($SPX) (SPY) on Tuesday closed up +0.27%, the Dow Jones Industrials Index ($DOWI) (DIA) closed up +0.43%, and the Nasdaq 100 Index ($IUXX) (QQQ) closed up +0.33%.  September E-mini S&P futures (ESU25) rose +0.28%, and September E-mini Nasdaq futures (NQU25) rose +0.36%. Stock indexes on Tuesday settled higher after the preliminary revision to US payrolls in the year through March showed the number of jobs was fewer than previously stated, bolstering the outlook for accelerated interest rat ...

MITCHEL FIELD, N.Y., Sept. 09, 2025 (GLOBE NEWSWIRE) -- Frequency Electronics, Inc. (NASDAQ: FEIM), will hold a conference call to discuss results for the first quarter of its fiscal year 2026, ended April 30, 2026, on Thursday, September 11, 2025, 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 877-545-0320. Internatio ...