Frequency Electronics, Inc. Announces Third Quarter Fiscal Year 2011 Results
10 3월 2011 - 6:00AM
Frequency Electronics, Inc. (Nasdaq:FEIM) reported revenues for the
third quarter of fiscal 2011, which ended January 31, 2011, of
$12.6 million, compared to $12.5 million in the preceding quarter
and $12.5 million for the same quarter of fiscal 2010. Revenues for
the first nine months of Fiscal 2011 were $37.3 million, compared
to $36.4 million for the same period of the previous fiscal year.
The Company recorded operating profit of $796,000 for the third
quarter, compared to an operating profit of $812,000 in the
preceding quarter and $314,000 in the third quarter of fiscal 2010.
Operating profit for the first nine months was $2.4 million,
compared to $1.2 million in the first nine months of the prior
fiscal year.
For the third quarter of fiscal 2011 net income was $508,000 or
$0.06 per diluted share, compared to net income of $328,000 or
$0.04 per diluted share, in the preceding quarter. For the
first nine months of fiscal 2011 net income was $1.3 million or
$0.16 per diluted share, after an income tax provision of $1.2
million. In the third quarter of the prior year, fiscal 2010,
the Company recognized a $2.0 million tax benefit as a result of a
change in tax laws in 2009. Including this tax benefit, net
income in the third quarter of fiscal 2010 was $2.0 million, or
$0.25 per diluted share, and $2.5 million or $0.31 per diluted
share, for the first nine months.
Chairman of the Board General Joseph Franklin made the following
comments: "We are very pleased to report that during this past
quarter contract awards rose to record levels. We also expect
significant additional awards in the near term from proposals
currently outstanding on both commercial and U.S. Government
programs. Most of this new business is for satellite products based
on FEI's designs for systems that are already operating
successfully in space. These products are leveraging our past
investments in engineering and manufacturing, and are generating
increased profitability. It is also very important to note
that the programs FEI is supporting are among the most critical for
the U.S. Government. All of this adds up to an outlook for
Frequency Electronics which is exceptionally positive."
Reports on the Company's major business
areas:
- Satellite Payloads: Revenues from space programs accounted
for approximately 30% of total revenues. Over 90% of the
Company's space business was on U.S. Government programs during
this quarter. Satellite revenues would have represented a
larger portion of total revenues had certain U.S. Government
programs been fully funded during this period. The Company
recognizes revenue only to the amounts funded even though it has
firm contracts for higher amounts. Thus, the Company defers
recognition of additional earned revenue on those programs until
the customer provides sufficient funding. 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 and recent contract
wins.
- U.S. Government/DOD non-satellite programs: This business
area represents approximately 30% of fiscal year 2011
revenues. 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.
- Network Infrastructure: Sales from this business area
exceeded 30% of consolidated revenues in the third quarter due to
increased wireline sales and increased orders from wireless network
infrastructure customers. The Company anticipates continued
growth in sales of the US5G family of wireline synchronization
products.
Reporting segments:
(Including inter-segment sales of $1.0 million in fiscal 2011
compared to $595,000 in fiscal 2010.)
- FEI-NY revenues were $7.9 million compared to $7.5 million in
the preceding quarter and $7.4 million in the third quarter of
fiscal 2010. The FEI-NY segment includes revenues from all
major business areas.
- Gillam-FEI recorded revenues of $3.6 million, compared to $2.2
million in the preceding quarter and $3.8 million in the third
quarter of fiscal 2010. The Gillam-FEI segment includes
revenues primarily from wireline network infrastructure and other
network management products.
- FEI-Zyfer revenues were $2.2 million, compared to $3.2 million
for the preceding quarter and $1.9 million in the third quarter of
fiscal 2010. The reduction in revenues from the preceding
quarter resulted primarily from lower U.S. Government/DOD
non-satellite sales. The major source of FEI-Zyfer's sales is
from U.S. Government/DOD programs.
Chief Financial Officer Alan Miller provided the following
comment on the Company's financial report: "Third quarter results
continue to demonstrate the positive effects of Frequency's
improved operating efficiency. Although revenues increased
modestly year-over-year, gross margin increased by 10% and
operating profit almost doubled. With our recent bookings of
significant new business, we expect revenues to rise but costs will
not increase by the same ratio. Thus, we anticipate even
higher profitability in future quarters."
"Third quarter revenues were impacted by funding limitations on
certain programs which we believe is a reflection of the current
U.S. budgeting process. These budgeting issues should have a
relatively insignificant and short-term impact on our
results. Any stretch-out in revenue recognition related to
current funding issues will benefit subsequent quarters when
funding is received. During this past quarter we were cash
flow positive and, year-to-date, we have generated over $2 million
in positive operating cash flow."
Investor Conference Call
As previously announced, the Company will hold a conference call
to discuss these results on Wednesday, March 9, 2011, 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 April
10, 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: 368880.
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 |
Nine Months Ended |
|
January 31, |
January 31, |
|
2011 |
2010 |
2011 |
2010 |
|
(unaudited) |
(unaudited) |
|
(in thousands except per share
data) |
|
|
Revenues |
$12,635 |
$12,524 |
$37,287 |
$36,360 |
Cost of Revenues |
7,786 |
8,102 |
22,888 |
23,243 |
Gross Margin |
4,849 |
4,422 |
14,399 |
13,117 |
Selling and Administrative |
2,820 |
2,608 |
8,380 |
7,948 |
Research and Development |
1,233 |
1,500 |
3,622 |
3,954 |
Operating Income |
796 |
314 |
2,397 |
1,215 |
Interest and Other, Net |
52 |
(235) |
107 |
(611) |
Income before Income Taxes |
848 |
79 |
2,504 |
604 |
Income Tax Provision (Benefit) |
340 |
(1,970) |
1,160 |
(1,970) |
Net Income |
$508 |
$2,049 |
$1,344 |
$2,574 |
|
|
|
|
|
Net Income per Share: |
|
|
|
|
Basic |
$0.06 |
$0.25 |
$0.16 |
$0.31 |
Diluted |
$0.06 |
$0.25 |
$0.16 |
$0.31 |
Average Shares Outstanding |
|
|
|
|
Basic |
8,262,713 |
8,184,627 |
8,249,225 |
8,176,638 |
Diluted |
8,372,187 |
8,222,574 |
8,325,665 |
8,197,367 |
|
Frequency Electronics,
Inc. and Subsidiaries |
Condensed Consolidated
Balance Sheets |
|
|
|
|
|
|
|
January 31, |
April 30, |
|
2011 |
2010 |
|
(in thousands) |
ASSETS |
Cash & Marketable Securities |
$22,030 |
$20,372 |
Accounts Receivable |
8,598 |
10,504 |
Costs and Estimated Earnings in Excess
of Billings |
2,332 |
1,667 |
Inventories |
28,475 |
26,975 |
Other Current Assets |
1,309 |
1,122 |
Property, Plant & Equipment |
6,728 |
7,015 |
Other Assets |
14,181 |
13,765 |
|
$83,653 |
$81,420 |
LIABILITIES AND
STOCKHOLDERS' EQUITY |
Current Liabilities |
$6,886 |
$7,308 |
Long-term Obligations and Other |
10,703 |
10,729 |
Stockholders' Equity |
66,064 |
63,383 |
|
$83,653 |
$81,420 |
CONTACT: Alan Miller, CFO, or General Joseph P. Franklin, Chairman:
TELEPHONE: (516) 794-4500
WEBSITE: www.frequencyelectronics.com
Frequency Electronics (NASDAQ:FEIM)
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