Financial Performance - Revenues for the three months ended January 31, 2025, increased to $18,927,000, a 38.5% increase from $13,714,000 in the same period of 2024[13] - Net income for the nine months ended January 31, 2025, was $20,489,000, a substantial increase from $2,969,000 in the same period of 2024, indicating strong financial performance[16] - Operating income for the three months ended January 31, 2025, was $3,469,000, compared to a loss of $473,000 in the same period of 2024, demonstrating a turnaround in operational efficiency[13] - Consolidated operating income for the three months ended January 31, 2025, was $3.5 million, compared to an operating loss of $0.5 million in the same period of 2024[40] - For the three months ended January 31, 2025, total revenue was approximately $18.9 million, compared to $13.7 million for the same period in 2024, representing a year-over-year increase of 37.5%[41] - For the nine months ended January 31, 2025, total revenues increased by 25.5% to $49.8 million compared to $39.7 million in the same period of the prior year[63] Profitability Metrics - Gross margin for the three months ended January 31, 2025, improved to $8,285,000, compared to $3,104,000 in the prior year, reflecting a significant increase in profitability[13] - The gross margin for the three months ended January 31, 2025, improved to 43.8% from 22.6% in the same period of the prior year, reflecting a significant increase in revenue and completion of major milestones in a large space program[66] - The company recorded a net income of 81.4% for the three months ended January 31, 2025, compared to 0.9% in the same period of the prior year[62] Cash and Assets - Total current assets decreased to $50,148,000 as of January 31, 2025, down from $58,121,000 as of April 30, 2024, primarily due to a reduction in cash and cash equivalents[11] - Cash and cash equivalents at the end of the period were $6,871,000, down from $12,604,000 at the end of January 31, 2024, reflecting cash outflows from financing activities[16] - Restricted cash as of January 31, 2025, was approximately $1.4 million, an increase from $945,000 as of April 30, 2024[47] - Cash and cash equivalents totaled $5.5 million as of January 31, 2025, down from $18.3 million as of April 30, 2024[48] - The total identifiable assets increased to $86.4 million as of January 31, 2025, compared to $83.3 million as of April 30, 2024[40] Liabilities and Financial Stability - Total liabilities decreased to $34,592,000 as of January 31, 2025, compared to $43,437,000 as of April 30, 2024, indicating improved financial stability[11] - The company's consolidated working capital position was approximately $27.3 million as of January 31, 2025, with a current ratio of 2.2 to 1[79] Research and Development - Research and development expenses for the three months ended January 31, 2025, increased to $1,436,000, up from $958,000 in the same period of 2024, highlighting ongoing investment in innovation[13] - Research and development expenses for the three months ended January 31, 2025, increased by 49.9% to $1.4 million compared to $958,000 in the same period of the prior year, driven by modernization efforts[68] - The company plans to continue investing in research and development to enhance product competitiveness and modernization efforts[68] - The company plans to continue investing in R&D for space applications and may pursue acquisitions to expand its product range[84] Shareholder Returns - The company paid dividends totaling $9,567,000 during the nine months ended January 31, 2025, reflecting a commitment to returning value to shareholders[16] - The company declared a special cash dividend of $1.00 per share, totaling approximately $9.6 million, paid on August 29, 2024[25] - The company has authorized a share repurchase of up to $5.0 million, having repurchased approximately $3.9 million worth of shares as of January 31, 2025[83] - The company repurchased a total of 11,802 shares during the quarter ended January 31, 2025, with an average price of $18.42 per share, totaling approximately $1,138,718[103] - As of January 31, 2025, the company has approximately $1,350,172 worth of shares that may yet be purchased under the repurchase program[103] Taxation - The company recognized a discrete tax benefit of $11.8 million during the three months ended January 31, 2025, resulting in an income tax benefit of 330.6% for that period[52] - The nine months ended January 31, 2025, saw an income tax benefit of $11.6 million, with an effective tax rate of 129.3% on pretax income of $8.9 million[78] - The estimated annual effective tax rate for the fiscal year ending April 30, 2025, is 3.54%[74] - As of January 31, 2025, the company maintained a valuation allowance of $1.3 million against certain deferred tax assets due to the need for sufficient taxable income to utilize these attributes[53] Operational Changes - The company has terminated all commercial relationships with Morion, Inc. due to sanctions related to the Russia-Ukraine conflict, resulting in a complete write-off of the investment in Morion[43][46] - The company has established alternate sources of supply for items previously acquired from Morion and is capable of fabricating crystal blanks in-house[46] - The company incurred approximately $4.2 million of non-cash operating expenses for the nine months ended January 31, 2025, compared to $3.1 million for the same period in 2024[80] - There were no updates or changes to the company's risk factors since the filing of the Form 10-K[102] Backlog and Future Expectations - The company had a consolidated funded backlog of approximately $73 million as of January 31, 2025, with about 65% expected to be realized in the next twelve months[85] - The company expects to maintain consistent SG&A expenses throughout the remainder of fiscal year 2025[67]
Frequency Electronics(FEIM) - 2025 Q3 - Quarterly Report