Frequency Electronics, Inc. Announces Second Quarter and Fiscal Year 2025 Financial Results

MITCHEL FIELD, N.Y., Dec. 10, 2024 (GLOBE NEWSWIRE) — Frequency Electronics, Inc. (“FEI” or the “Company”) (NASDAQ-FEIM) is reporting revenues for the three and six months ended October 31, 2024, of approximately $15.8 million and $30.9 million, respectively, compared to revenues of $13.6 million and $26.0 million, for the same period of fiscal year 2024, ended October 31, 2023. Operating income for the three and six months ended October 31, 2024 was $2.6 million and $5.0 million, respectively, compared to operating income of $0.9 million and $3.0 million for the same period of fiscal year 2024. Net Income from operations for the three and six months ended October 31, 2024 was $2.7 million or $0.28 per diluted share and $5.1 million or $0.53 per diluted share, respectively, compared to a net income from operations for the three and six months ended October 31, 2023 of $0.8 million or $0.08 per diluted share and $2.9 million or $0.30 per diluted share, respectively.

FEI President and CEO, Tom McClelland commented, “By all financial metrics the second quarter of fiscal year 2025 performance was excellent. For both the quarter and year to date, revenue, gross margin, and operating income have grown substantially. The backlog is also holding strong; at $81 million (an all-time high) compared to $70 million at the end of the first quarter, and $78 million at the end of last fiscal year. The results reflect continued solid growth in our core businesses, which show every indication of continuing. We are well into the execution phase of several key programs won over the last two years, and our gross margins (48% for the quarter, and 46% for the first half of FY2025) reflect our successful efforts to obtain work, and deliver it successfully. Our ability to perform at high operational standards on our heritage satellite programs allows us to pursue new developments (especially for proliferated small satellites), which at least initially may be at lower margins. As we have been successful obtaining a mix of heritage and new development work, we anticipate continued profitability going forward, though the mix in any given quarter could potentially cause variability. Nonetheless, we believe that the operational improvements we have made over the past few years will allow us to generally achieve higher, more consistent margins than we have experienced in the past.

“In October, FEI hosted a ‘Quantum Sensor Summit’ in New York City, a technical conference bringing together experts from around the world to share insights and expectations regarding this rapidly developing area of technology. This event was well attended, and we have obtained a lot of positive feedback from it. Quantum sensors is a rapidly developing market, one which FEI is well positioned to participate in based on our existing expertise, and one which we are actively pursuing as an avenue to continued growth well into the future. To support this effort we pursue external development funding where possible, but are also using internal R&D funding as necessary. This year internal R&D expenditures are up significantly (10% of revenue) as we work to stay competitive in this arena, but we remain debt-free and are confident in our ability to invest for profitable growth, reward our employees for serving our customers and maintain flexibility for shareholder-oriented initiatives, such as the two special dividends we have paid over the past two years.

“All and all, I am happy with our performance, excited about our future, and proud to lead a workforce of talented and very dedicated individuals who are the real reason behind our success.”

Fiscal Year 2024 Selected Financial Metrics and Other Items

For the three and six months ended October 31, 2024, revenues from satellite payloads were approximately $9.4 million, or 59%, and $17.7 million or 57%, respectively, of consolidated revenues compared to approximately $4.7 million, or 35%, and $9.5 million or 37%, respectively, for the same periods of the prior fiscal year.
For the three and six months ended October 31, 2024, revenues for non-space U.S. Government/DOD customers were approximately $5.8 million, or 37%, and $12.1 million or 39%, respectively, of consolidated revenues compared to approximately $8.2 million, or 60%, and $15.1 million, or 58%, respectively, for the same periods of the prior fiscal year.
For the three and six months ended October 31, 2024, revenues from other commercial and industrial sales accounted for approximately $0.6 million, or 4%, and $1.1 million or 4%, respectively, of consolidated revenues compared to approximately $0.7 million, or 5%, and $1.4 million, or 5%, respectively, for the same periods of the prior fiscal year.
Net cash provided by operating activities was approximately $2.4 million in the six months of fiscal year 2025, compared to net cash used in operations of $3.0 million for the same period of fiscal year 2024.
Backlog at October 31, 2024 was approximately $81 million compared to $78 million at April 30, 2024.

Investor Conference Call

As previously announced, the Company will hold a conference call to discuss these results on Tuesday, December 10, 2024, at 4:30 PM Eastern Time. Investors and analysts may access the call by dialing 1-888-506-0062. International callers may dial 1-973-528-0011. Callers should provide participant access code: 685880 or 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 (replay passcode: 51761). Subsequent to that, the call can be accessed via a link available on the Company’s website through March 10, 2025.

About Frequency Electronics

Frequency Electronics, Inc. (FEI) 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. FEI’s 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. FEI-Zyfer provides GPS and secure timing capabilities for critical military and commercial applications; FEI-Elcom Tech provides Electronic Warfare (“EW”) sub-systems and state-of-the-art RF and microwave products. FEI 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.