Frequency Electronics(US:FEIM)2019-12-16 20:11Financial Performance - Revenues for the six months ended October 31, 2019, were $21,641,000, a decrease of 6.5% from $23,153,000 in the same period of 2018[14] - Gross margin for the six months ended October 31, 2019, was $2,771,000, down 66.6% from $8,293,000 in the prior year[14] - The net loss for the six months ended October 31, 2019, was $5,500,000 compared to a net income of $153,000 in the same period of 2018[14] - Operating loss for the three months ended October 31, 2019, was $4,922,000, significantly higher than the operating loss of $230,000 in the same quarter of 2018[22] - Consolidated revenues for the six months ended October 31, 2019, were $21.64 million, a decrease from $23.15 million for the same period in 2018[58] - Consolidated operating loss for the six months ended October 31, 2019, was $5.70 million, compared to a loss of $0.15 million in the same period of 2018[58] - The net loss for the six months ended October 31, 2019, was (25.4)%, compared to a net income of 0.6% in the same period of 2018[94] - The operating loss for the six months ended October 31, 2019, was $5.703 million, an increase of $5.557 million compared to the same period in 2018[104] Assets and Liabilities - Total assets increased to $91,949,000 as of October 31, 2019, from $86,771,000 as of April 30, 2019[12] - Total liabilities rose to $33,781,000 as of October 31, 2019, compared to $23,682,000 as of April 30, 2019[12] - The company had total stockholders' equity of $58,168,000 as of October 31, 2019, down from $63,089,000 as of April 30, 2019[12] - Identifiable assets for the Company totaled $91.95 million as of October 31, 2019, an increase from $86.77 million on April 30, 2019[58] Cash Flow and Investments - Cash and cash equivalents decreased to $2,606,000 as of October 31, 2019, from $3,683,000 as of April 30, 2019[12] - Net cash provided by operating activities was $180,000 in 2019, a significant improvement from a net cash used of $1.1 million in 2018[25] - The net cash used in investing activities was $1.257 million in 2019, a decrease from $2.596 million in 2018[25] - Cash provided by operations for the six months ended October 31, 2019, was $180,000, a significant improvement compared to $1.1 million used in operations in the same period of 2018[114] - The company's liquidity position included $11.0 million in cash, cash equivalents, and marketable securities as of October 31, 2019[113] Revenue Segmentation - Revenue recognized under percentage of completion (POC) contracts was approximately $19.1 million for the six months ended October 31, 2019, compared to $20.4 million for the same period in 2018[40] - Satellite revenue for the six months ended October 31, 2019, was $9,431,000, down from $11,302,000 in the same period of 2018, indicating a decline of approximately 16.6%[60] - Government non-space revenue for the six months ended October 31, 2019, was $9,005,000, compared to $10,420,000 in the same period of 2018, a decrease of about 13.6%[60] - Revenues from commercial and U.S. Government satellite programs accounted for approximately 44% of consolidated revenues for the six months ended October 31, 2019, down from 49% in the same period of fiscal 2018[96] - Revenues from the FEI-NY segment decreased by 8.3% to $16.8 million for the six months ended October 31, 2019, compared to $18.3 million in the same period of 2018[96] - Revenues from the FEI-Zyfer segment increased by 11.7% to $5.7 million for the six months ended October 31, 2019, compared to $5.1 million in the same period of 2018[96] Research and Development - Research and development expenses for the six months ended October 31, 2019, were $3,731,000, an increase of 14.5% from $3,257,000 in the same period of 2018[14] - Research and development (R&D) expenses for the six months ended October 31, 2019, were $3.731 million, an increase of $474,000 (14.6%) compared to the same period in 2018, representing 17% of sales[103] - Research and development expenses increased to 17.3% of revenues for the six months ended October 31, 2019, compared to 14.1% in the same period of 2018[94] Stockholder and Corporate Actions - The company has repurchased approximately $4 million of its common stock out of the $5 million authorization as of October 31, 2019[118] - The company anticipates securing additional customer funding for a portion of its R&D activities and may pursue acquisitions to expand its product range[119] - Frequency Electronics, Inc. filed its quarterly report on Form 10-Q for the quarter ended October 31, 2019[132] - Certifications by the Chief Executive Officer and Chief Financial Officer were submitted in accordance with the Sarbanes-Oxley Act of 2002[131] Tax and Valuation - The effective tax rate for the six months ended October 31, 2019, was (0.5)% on a pretax loss of $5.808 million, compared to an income tax benefit of (17.7)% on pretax income of $130,000 in the prior year[111] - The company maintained a full valuation allowance against its deferred tax assets as of October 31, 2019, indicating potential realizability concerns[80]