Frequency Electronics, Inc. Announces Second Quarter Fiscal Year 2017 Results
15 12월 2016 - 6:36AM
Frequency Electronics, Inc. (NASDAQ:FEIM) reported revenues for the
second quarter of fiscal 2017, which ended October 31, 2016, of
$12.9 million as compared to $16.0 million in the same quarter of
fiscal 2016. Revenues for the first six months of fiscal 2017
were $25.6 million compared to $32.7 million recorded in the same
period of the prior year.
The Company recorded an operating loss of $1.3
million for the quarter ended October 31, 2016, compared to an
operating profit of $48,000 in the second quarter of fiscal
2016. Operating loss for the first six months of fiscal year
2017 was $2.1 million compared to an operating profit of $1.0
million in the first half of fiscal year 2016.
Net loss for the second quarter of fiscal 2017
was $1.0 million or ($0.12) per diluted share compared to a net
loss of $69,000 or ($0.01) per diluted share for the second quarter
of the prior year. For the year to date, net loss was $1.7 million
or ($0.20) per diluted share, compared to net income of $822,000 or
$0.09 per diluted share.
Commenting on these results and the business
outlook, Chairman of the Board Joel Girsky said: “Reversing the
trend of these last six months, Frequency expects to achieve
positive operating income in the current quarter and going
forward.
“With respect to our satellite business,
principal customers in both the Commercial and US Government arenas
had indicated they expected an upturn in project releases late this
year. This upturn appears to be underway. Our bookings to date are
substantially higher than the rate of the past several months. We
just reported approximately $7 million in new key contracts.
“In our secure communications business area we
are making excellent progress in bookings, production under
existing contracts and, most importantly, product development for a
market which over time can be as large or greater than any other we
have ever addressed.
“Operating results for the first six months of
fiscal 2017 were impacted not only by lower revenues and product
mix but also by large one-time expenses which are not expected to
reoccur during the balance of the year. Based on cost saving
measures now in place along with rising revenues and our internal
operating leverage, we expect to show an operating profit for the
full fiscal year 2017.
“Internal research and development during the
past six months rose substantially, approaching $4 million as we
focused available engineering efforts on meeting next generation
product requirements for the new market opportunities ahead in both
satellite payloads and secure communications.
“As well, we are actively addressing operations
at each of our subsidiaries with a view toward improving
consolidated performance and generating additional cash.”
Fiscal 2017 Selected Financial Metrics
and Other Items:
- For the six months ended October 31, 2016, satellite payload
revenues both US Government/DOD and Commercial was $10.6 million
and accounted for approximately 41% of consolidated revenues
compared to $18.9 million and 58% of consolidated revenues for the
same period in prior year, a $8.2 million decline.
- Sales for U.S. Government/DOD, non-space end use accounted for
approximately 35% of consolidated revenues compared to 24% of
revenues for the same period of last year. We anticipate
sales in this business area to remain at or above current levels
during the balance of the year.
- Gross margin rate for the quarter ended October 31, 2016
decreased to 32.1% as compared to 33.8% during the fourth quarter
of fiscal 2016 and to 33.6% during the second quarter of last
year. The decline in margin and gross margin rate resulted
from respectively a decrease in sales and a higher cost product
mix.
- Research and development expense rose to $2.2 million for the
three months ended October 31, 2016 and $3.8 million for the six
months ended October 31, 2016, compared to $1.9 million and $3.1
million for the same periods of fiscal 2016. During periods of
lower customer shipments the company can and will allocate
increased available engineering resources to necessary R&D
projects.
- Backlog at the end of the quarter was $39 million up from $32
million at year end and $23 million at the end of the quarter
ending October 31, of fiscal 2016.
Investor Conference Call
As previously announced, the Company will hold a
conference call to discuss these results on Wednesday, December 14,
2016, 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 8, 2017. The archived call may also
be retrieved at 1-877-660-6853 (domestic) or 1-201-612-7415
(international) using Conference ID #: 13651595.
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
satellite payloads and in other commercial, government and military
systems including C4ISR markets, missiles, UAVs, aircraft, GPS,
secure radios, energy exploration and wireline and wireless
communication networks. Frequency has received over 100
awards of excellence for achievements in providing high performance
electronic assemblies for over 150 space and DOD programs.
The Company invests significant resources in research and
development and strategic acquisitions world-wide to expand its
capabilities and markets.
Frequency’s Mission Statement: “Our mission is
to provide precision time and low phase noise frequency generation
systems from 1 Hz to 46 GHz, for space and other challenging
environments.”
Subsidiaries and Affiliates: Gillam-FEI provides
expertise in network synchronization and monitoring; FEI-Zyfer
provides GPS and secure timing ("SAASM") capabilities for critical
military and commercial applications; FEI-Asia provides cost
effective manufacturing capabilities; FEI-Elcom Tech provides added
resources for state-of-the-art RF microwave products.
Frequency's Morion affiliate supplies high-quality, cost
effective oscillators and components. 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 |
|
|
|
|
|
|
|
Six Months ended |
|
Quarter Ended |
|
|
October 31, |
|
October 31, |
|
|
2016 |
|
|
2015 |
|
2016 |
|
|
2015 |
|
|
(unaudited) |
|
(in thousands except per share data) |
Revenues |
$ |
25,622 |
|
$ |
32,684 |
$ |
12,914 |
|
$ |
16,003 |
|
Cost of Revenues |
|
17,395 |
|
|
21,686 |
|
8,801 |
|
|
10,779 |
|
Gross
Margin |
|
8,227 |
|
|
10,998 |
|
4,113 |
|
|
5,224 |
|
Selling and
Administrative |
|
6,598 |
|
|
6,916 |
|
3,272 |
|
|
3,230 |
|
Research and
Development |
|
3,772 |
|
|
3,093 |
|
2,188 |
|
|
1,946 |
|
Operating
(Loss) Profit |
|
(2,143 |
) |
|
989 |
|
(1,347 |
) |
|
48 |
|
Interest and Other,
Net |
|
209 |
|
|
713 |
|
159 |
|
|
63 |
|
(Loss) Income before
Income Taxes |
|
(1,934 |
) |
|
1,702 |
|
(1,188 |
) |
|
111 |
|
Income Tax
Provision |
|
(204 |
) |
|
880 |
|
(164 |
) |
|
180 |
|
Net
(Loss) Income |
$ |
(1,730 |
) |
$ |
822 |
$ |
(1,024 |
) |
$ |
(69 |
) |
|
|
|
|
|
Net (Loss) Income per
Share: |
|
|
|
|
Basic |
$ |
(0.20 |
) |
$ |
0.09 |
$ |
(0.12 |
) |
$ |
(0.01 |
) |
Diluted |
$ |
(0.20 |
) |
$ |
0.09 |
$ |
(0.12 |
) |
$ |
(0.01 |
) |
Average Shares
Outstanding |
|
|
|
|
Basic |
|
8,771 |
|
|
8,716 |
|
8,781 |
|
|
8,725 |
|
Diluted |
|
8,771 |
|
|
8,959 |
|
8,781 |
|
|
8,725 |
|
Frequency Electronics, Inc. and
Subsidiaries |
Condensed Consolidated Balance
Sheets |
|
|
|
October 31, |
|
|
April 30, |
|
|
2016 |
|
|
2016 |
|
|
(unaudited) |
|
|
(audited) |
|
|
(in thousands) |
ASSETS |
|
|
|
|
|
Cash
& Marketable Securities |
$ |
14,390 |
|
$ |
17,193 |
Accounts Receivable |
|
9,227 |
|
|
9,000 |
Costs
and Estimated Earnings |
|
|
in Excess of Billings, net |
|
10,710 |
|
|
12,377 |
Inventories |
|
41,770 |
|
|
41,278 |
Other
Current Assets |
|
5,711 |
|
|
4,463 |
Property, Plant & Equipment |
|
14,112 |
|
|
13,072 |
Other
Assets |
|
22,359 |
|
|
22,831 |
|
$ |
118,279 |
|
$ |
120,214 |
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS’ EQUITY |
|
|
|
|
|
Current Liabilities |
$ |
6,659 |
|
|
8,758 |
Long-term debt |
|
6,000 |
|
|
6,000 |
Other
Long-term Obligations |
|
12,881 |
|
|
12,104 |
Stockholders' Equity |
|
92,739 |
|
|
93,352 |
|
$ |
118,279 |
|
$ |
120,214 |
Contact information:
Martin B. Bloch, President and CEO:
Telephone: (516) 794-4500
Website: www.frequencyelectronics.com
Frequency Electronics (NASDAQ:FEIM)
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Frequency Electronics (NASDAQ:FEIM)
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