GlobeNewswire Inc | Dec 10, 2020 04:01PM EST

December 10, 2020

MITCHEL FIELD, N.Y., Dec. 10, 2020 (GLOBE NEWSWIRE) -- Frequency Electronics, Inc. (FEI or the Company) (NASDAQ-FEIM) is reporting revenues for the three and six month periods of fiscal 2021, ended October 31, 2020, of $14.0 million and $26.9 million, respectively, compared to revenues of $9.1 million and $21.6 million, respectively, for the same periods of fiscal 2020, ended October 31, 2019. Operating profit for the second quarter of fiscal 2021 was $219,000 compared to an operating loss of $4.9 million for the same period of fiscal 2020. Operating loss was $119,000 for the six months ended October 31, 2020 compared to an operating loss of $5.7 million for the six months ended October 31, 2019. Net income for the three and six months ended October 31, 2020 was $329,000 or $0.04 per diluted share and $67,000 or $0.01 per diluted share, respectively, compared to net losses of $4.9 million or ($0.54) per share and $5.5 million or ($0.61) per share, respectively, for the same periods of fiscal 2020.

FEI CEO Stan Sloane commented, I am very pleased with our results this quarter. We saw revenues increase to almost $14 million, about a $1 million increase from first quarter, and a 54% increase from the second quarter of fiscal year 2020. Despite significant legal expenses this year, we generated net income for the quarter of $329,000 a substantial improvement from last quarter and Q2 of the prior year. Further, as we completed the problem contracts we described in previous quarters, we also saw a return to improved gross margins, which were 38% in the current quarter as compared to 32% last quarter and negative 13% a year ago. Backlog was up to $42 million, a $6 million increase from the end of fiscal year 2020, a reflection of all the new business opportunities we have talked about in prior calls. We also generated $2 million of cash from operations for the year. We have hired engineering and manufacturing staff in order to address the increased backlog and have maintained full operations through the quarter while closely monitoring COVID-19 developments in order to be prepared for possible impacts to our workforce or in our supply chain. All in all, a good quarter I am pleased to report.

Fiscal Year2021Selected Financial Metrics and Other Items

-- For the six months ended October 31, 2020, revenues from satellite payloads were approximately $14.2 million, or 53%, of consolidated revenues compared to $9.4 million, or 44%, for the prior year. For the three months ended October 31, 2020, revenues from satellite payloads were approximately $7.6 million, or 54%, of consolidated revenues compared to $5.5 million, or 61%, for the prior year. -- For the six months ended October 31, 2020, revenues for non-space U.S. Government/DOD customers were $10.9 million, or 40%, of consolidated revenues compared to $9.0 million, or 42%, for the prior year. For the three months, ended October 31, 2020, revenues for non-space U.S. Government/DOD customers were $5.5 million, or 39%, of consolidated revenues compared to $2.3 million, or 25%, for the prior year. -- For the six months ended October 31, 2020, revenues from other commercial and industrial sales accounted for approximately $1.9 million, or 7%, of consolidated revenues compared to approximately $3.2 million, or 15%, for the prior year. For the three months ended October 31, 2020, revenues from other commercial and industrial sales accounted for approximately $894,000, or 6% of consolidated revenues compared to approximately $1.3 million, or 14%, for the prior year. -- Net cash provided by operating activities for the six months ended October 31, 2020 was $2.0 million compared to $180,000 in the comparable prior fiscal 2020 period. -- Backlog at October 31, 2020 was $42 million compared to $36 million at April 30, 2020.

Investor Conference Call

As previously announced, the Company will hold a conference call to discuss these results on Thursday, December 10, 2020, 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 archived call may be accessed by calling 1-877-481-4010 (domestic), or 1-919-882-2331 (international), for one week following the call. Subsequent to that, the call can be accessed via a link available on the companys website through March 10, 2021.

About Frequency Electronics

Frequency Electronics, Inc. is a world leader in the design, development and manufacture of high precision timing, frequency generation and RF control products for space and terrestrial applications. Frequencys products are used in satellite payloads and in other commercial, government and military systems including C4ISR and electronic warfare, missiles, UAVs, aircraft, GPS, secure communications, energy exploration and wireline and wireless 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 to expand its capabilities and markets.

Frequencys Mission Statement: Our mission is to provide precision time and low phase noise frequency generation systems from 1 Hz to 50 GHz, for space and other challenging environments.

Subsidiaries and Affiliates: FEI-Zyfer provides GPS and secure timing ("SAASM") capabilities for critical military and commercial applications; FEI-Elcom Tech provides Electronic Warfare (EW) sub-systems and state-of-the-art RF microwave products. Additional information is available on the Companys website: www.frequencyelectronics.com

Contact information: Stanton Sloane, President & Chief Executive Officer; Steven Bernstein, Chief Financial Officer; TELEPHONE: (516) 794-4500 ext.5000 WEBSITE:www.freqelec.com

Frequency Electronics, Inc. and SubsidiariesCondensed Consolidated Statements of Operations

Three Months Ended Six Months Ended October 31, October 31, (unaudited) (unaudited) 2020 2019 2020 2019 Revenues $ 13,990 $ 9,087 $ 26,940 $ 21,641 Cost of 8,668 10,269 17,530 18,870 RevenuesGross Margin 5,322 (1,182 ) 9,410 2,771 Selling and 4,124 2,290 7,352 4,743 AdministrativeResearch and 979 1,450 2,177 3,731 DevelopmentOperating 219 (4,922 ) (119 ) (5,703 )Income LossInterest and 127 22 211 232 Other, NetIncome (Loss)before Income 346 (4,900 ) 92 (5,471 )TaxesIncome Tax 17 9 25 29 BenefitNet (Loss) $ 329 $ (4,909 ) $ 67 $ (5,500 )Income Net Income(Loss) per share:Basic anddiluted (loss) $ 0.04 $ (0.54 ) $ 0.01 $ (0.61 )earnings pershare Average Shares OutstandingBasic 9,170 9,072 9,154 9,037 Diluted 9,236 9,072 9,206 9,037



Frequency Electronics, Inc. and SubsidiariesCondensed Consolidated Balance Sheets

October 31, April 30, 2020 2020 (unaudited) (in thousands)ASSETS Cash & Marketable Securities $ 13,602 $ 14,378Accounts Receivable 10,298 4,392Costs and Estimated Earnings in Excess of Billings, 3,201 6,953netInventories, net 21,028 22,958Other Current Assets 2,793 2,554Property, Plant & Equipment, net 10,511 11,267Other Assets 17,951 17,910Right-of-Use Assets ? Leases 10,235 10,864 $ 89,619 $ 91,276

LIABILITIES AND STOCKHOLDERS EQUITY

Lease Liability - current $ 1,612 $ 1,869Current Liabilities 9,631 11,119Other Long-term Obligations 14,783 14,608Lease Liability ? non-current 8,937 9,444Stockholders? Equity 54,656 54,236 $ 89,619 $ 91,276