Frequency Electronics, Inc. Announces Second Quarter Fiscal Year 2011 Results
09 12월 2010 - 6:00AM
Frequency Electronics, Inc. (Nasdaq:FEIM) reported revenues for the
second quarter of fiscal 2011, which ended October 31, 2010, of
$12.5 million, compared to $12.1 million in the preceding quarter
and $11.4 million for the same quarter of fiscal 2010. Revenues for
the first six months of Fiscal 2011 were $24.7 million, compared to
$23.8 million for the same period of the previous fiscal year.
The Company recorded operating profit of $812,000 for the second
quarter, compared to an operating profit of $789,000 in the
preceding quarter and $242,000 in the second quarter of fiscal
2010. Operating profit for the first six months was $1.6 million,
compared to $901,000 in the first six months of the prior fiscal
year.
Net income was $328,000 or $0.04 per diluted share, for the
second quarter of fiscal 2011, compared to net income of $507,000
or $0.06 per diluted share, in the preceding quarter, and a loss of
$129,000 or ($0.02) per diluted share for the second quarter of
fiscal 2010. For the first six months of fiscal 2011 net income was
$835,000 or $0.10 per diluted share, after income taxes of
$820,000, compared to net income of $525,000 or $0.06 per diluted
share, after no income taxes, for the same period of the prior
fiscal year.
Chairman of the Board General Joseph Franklin made the following
comments:
"Results for the first half of this fiscal year continue to
reflect the positive track we set for increased revenues with
improved margins and profitability. During this past quarter we
booked a significant add-on to a major satellite development
program for flight hardware as well as other satellite programs
totaling more than $7 million.
"After the quarter ended, we concluded final negotiations for
two other large satellite contracts. On December 7, we
received a firm order for approximately $5 million on one of these
programs. A separate announcement is being made with details
of this very important contract. (See press release dated
December 8, 2010, "Frequency Electronics Announces Satellite
Contract.") We expect a contract award on the second
program in the very near future. These are very exciting times
for Frequency Electronics. We are looking forward to a very
positive second half of this fiscal year."
Reports on the Company's major business
areas:
- Satellite Payloads: Revenues from space programs accounted
for more than one-third of total revenues. Over 90% of the
Company's space business was on government programs during this
quarter. Present backlog maintains a high ratio of U.S.
government space business. We anticipate growth in the
commercial satellite sector based on the large dollar value of
outstanding proposals.
- U.S. Government/DOD non-satellite programs: This business
area represented over 30% of revenues for this past
quarter. Based on the multiple DOD development programs
awarded the Company for secure communications, high resolution
radar, smart munitions, and electronic intelligence, we anticipate
this business area will grow to a larger portion of the Company's
sales. Frequency's products address critical DOD requirements
with projected high growth.
- Telecommunications infrastructure: Sales from this
business area represented approximately 25% of consolidated
revenues. The Company anticipates continued growth in sales of
the US5G family of wireline synchronization products.
Reporting segments:
(Including inter-segment sales of $389,000 in fiscal 2011
compared to $634,000 in fiscal 2010.)
- FEI-NY revenues were $7.5 million compared to $7.6 million in
the preceding quarter and $6.9 million in the second quarter of
fiscal 2010. The FEI-NY segment includes revenues from all
major business areas.
- Gillam-FEI recorded revenues of $2.2 million, compared to $3.0
million in the preceding quarter and $2.5 million in the second
quarter of fiscal 2010. The Gillam-FEI segment includes
revenues primarily from wireline telecommunications infrastructure
and other network management products.
- FEI-Zyfer revenues were $3.2 million, compared to $2.5 million
for the preceding quarter and $2.6 million in the second quarter of
fiscal 2010. The major source of FEI-Zyfer's sales is from US
Government/DOD programs in addition to revenues from the US5G
wireline synchronization productline.
Chief Financial Officer Alan Miller provided the following
comment on the Company's financial report: "Second quarter results
continued the profitable trend which began last fiscal
year. Operating margins improved on modest quarter-to-quarter
increases in revenue. The full valuation allowance against
deferred tax assets continues to skew after tax results. As we
generate taxable profits in future periods the deferred tax
valuation allowance may be reduced. During this past quarter
increases in working capital, mainly consolidated accounts
receivable and work-in-process inventory at Gillam-FEI, reduced
cash. These working capital increases are temporary. We
expect positive cash flow for the full fiscal year and further
margin improvements as we book new contracts in the near term."
Investor Conference Call
As previously announced, the Company will hold a conference call
to discuss these results on Wednesday, December 8, 2010, at 4:30 PM
Eastern Time. Investors and analysts may access the call by
dialing 1-877-407-9205. International callers may dial
1-201-689-8054. Ask for the Frequency Electronics conference
call.
The call will be archived on the Company's website through
January 11, 2011. The archived call may also be retrieved at
1-877-660-6853 (domestic) or 1-201-612-7415 (international) using
Passcodes (both are required for playback): Account: 286,
Conference ID: 362555.
About Frequency Electronics
Frequency Electronics, Inc. is a world leader in the design,
development and manufacture of high precision timing, frequency
control and synchronization products for space and terrestrial
applications. Frequency's products are used in commercial,
government and military systems, including satellite payloads,
missiles, UAVs, aircraft, GPS, secure radios, SCADA, energy
exploration and wireline and wireless communication networks.
Frequency has received over 60 awards of excellence for
achievements in providing high performance electronic assemblies
for over 120 space programs. The Company invests significant
resources in research and development and strategic acquisitions
world-wide to expand its capabilities and markets.
Subsidiaries and Affiliates: Gillam-FEI provides expertise in
wireline network synchronization and SCADA; FEI-Zyfer provides GPS
and secure timing ("SAASM") capabilities for critical military and
commercial applications; FEI-Asia provides cost effective
manufacturing and distribution capabilities in a high growth
market. Frequency's Morion affiliate supplies high-quality,
cost effective quartz oscillators and components. Elcom
Technologies provides added resources for state-of-the-art RF
microwave products. Additional information is available on
the Company's website: www.frequencyelectronics.com.
Safe Harbor Statement under the Private Securities Litigation
Reform Act of 1995: The Statements in this press release regarding
the future constitute "forward-looking" statements pursuant to the
safe harbor provisions of the Private Securities Litigation Reform
Act of 1995. Forward-looking statements inherently involve
risks and uncertainties that could cause actual results to differ
materially from the forward-looking statements. Factors that
would cause or contribute to such differences include, but are not
limited to, inability to integrate operations and personnel,
actions by significant customers or competitors, general domestic
and international economic conditions, consumer spending trends,
reliance on key customers, continued acceptance of the Company's
products in the marketplace, competitive factors, new products and
technological changes, product prices and raw material costs,
dependence upon third-party vendors, competitive developments,
changes in manufacturing and transportation costs, the availability
of capital, and other risks detailed in the Company's periodic
report filings with the Securities and Exchange Commission. By
making these forward-looking statements, the Company undertakes no
obligation to update these statements for revisions or changes
after the date of this release.
Frequency Electronics,
Inc. and Subsidiaries |
Condensed Consolidated
Statement of Operations |
|
|
|
|
|
|
Quarter Ended |
Six Months Ended |
|
October 31, |
October 31, |
|
2010 |
2009 |
2010 |
2009 |
|
(unaudited) |
(unaudited) |
|
(in thousands except per share
data) |
|
|
|
|
|
Revenues |
$12,528 |
$11,395 |
$24,652 |
$23,836 |
Cost of Revenues |
7,724 |
7,001 |
15,102 |
15,141 |
Gross Margin |
4,804 |
4,394 |
9,550 |
8,695 |
|
|
|
|
|
Selling and Administrative |
2,765 |
2,773 |
5,560 |
5,340 |
Research and Development |
1,227 |
1,379 |
2,389 |
2,454 |
Operating Profit |
812 |
242 |
1,601 |
901 |
Interest and Other, Net |
(14) |
(371) |
54 |
(376) |
Income (Loss) before Income Taxes |
798 |
(129) |
1,655 |
525 |
Income Tax Provision |
470 |
-- |
820 |
-- |
Net Income (Loss) |
$328 |
$(129) |
$835 |
$525 |
|
|
|
|
|
Net Income (Loss) per Share: |
|
|
|
|
Basic |
$0.04 |
$(0.02) |
$0.10 |
$0.06 |
Diluted |
$0.04 |
$(0.02) |
$0.10 |
$0.06 |
|
|
|
|
|
Average Shares Outstanding |
|
|
|
|
Basic |
8,251,391 |
8,180,659 |
8,242,481 |
8,172,643 |
Diluted |
8,323,303 |
8,180,659 |
8,302,405 |
8,184,764 |
|
|
|
Frequency Electronics,
Inc. and Subsidiaries |
Condensed Consolidated
Balance Sheets |
|
|
|
|
October 31, |
April 30, |
|
2010 |
2010 |
|
(in thousands) |
|
|
|
ASSETS |
|
|
Cash & Marketable Securities |
$18,961 |
$20,372 |
Accounts Receivable |
11,855 |
10,504 |
Costs and Estimated Earnings in Excess of
Billings |
2,466 |
1,667 |
Inventories |
28,954 |
26,975 |
Other Current Assets |
1,396 |
1,122 |
Property, Plant & Equipment |
6,811 |
7,015 |
Other Assets |
14,057 |
13,765 |
|
$84,500 |
$81,420 |
|
|
|
LIABILITIES AND STOCKHOLDERS'
EQUITY |
|
|
Current Liabilities |
$7,793 |
$7,308 |
Long-term Obligations and Other |
10,753 |
10,729 |
Stockholders' Equity |
65,954 |
63,383 |
|
$84,500 |
$81,420 |
CONTACT: Frequency Electronics, Inc.
Alan Miller, CFO
General Joseph P. Franklin, Chairman
(516) 794-4500
www.frequencyelectronics.com
Frequency Electronics (NASDAQ:FEIM)
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