Frequency Electronics, Inc. Announces Second Quarter Fiscal Year 2014 Results

Frequency Electronics, Inc. Announces Second Quarter Fiscal Year 2014 Results

MITCHEL FIELD, N.Y., Dec. 11, 2013 (GLOBE NEWSWIRE) -- Frequency Electronics,
Inc. (Nasdaq:FEIM) reported revenues for the second quarter of fiscal 2014,
which ended October 31, 2013, of $17.0 million, up from $16.8 million recorded
in the preceding quarter and compared to $17.6 million recorded in the second
quarter of fiscal 2013. Revenues for the first six months of fiscal 2014 were
$33.8 million compared to $34.3 million recorded in the same period of the
prior year.

The Company recorded operating profit of $1.3 million for the quarter ended
October 31, 2013, up from $1.0 million in the preceding quarter and compared
to $2.0 million in the second quarter of the prior year. Operating profit for
the first six months of fiscal year 2014 was $2.2 million compared to $3.1
million in the first half of fiscal year 2013. Net income for the second
quarter of fiscal 2014 was $1.4 million or $0.16 per diluted share, up from
$676,000 or $0.08 per diluted share in the preceding quarter and compared to
$1.4 million or $0.17 per diluted share for the second quarter of the prior
year. For the year to date, net income was $2.1 million or $0.24 per diluted
share compared to the prior year's $2.2 million or $0.26 per diluted share.
Fiscal year 2014 results include $736,000 in net proceeds from the sale of
certain manufacturing equipment under a rubidium oscillator license agreement.

Commenting on these results, Chairman of the Board General Joseph Franklin
said: "Our satellite payload business continued to experience solid growth and
for the first six months of our current fiscal year revenues were up almost
20% over last year.The increase in revenues and the operating profits from
the satellite business area substantially offset reduced revenues and
operating results in our non-space business areas.For the balance of this
fiscal year we expect results for the non-space business areas will continue
at approximately current levels.Based on our excellent level of bookings so
far this year and the continued rise in funded backlog, we look forward to
gains in revenues, operating profits and cash flow in the second half of this
fiscal year 2014."

Fiscal 2014 Selected Financial Metrics and Other Items:

  *For the six months ended October 31, 2013, satellite payload revenues
    accounted for more than half of consolidated revenues. Satellite payloads
    account for over three-fourths of the Company's consolidated backlog.
  *For the six months ended October 31, 2013, total sales for U.S.
    Government/DOD end-use, including revenues on U.S. Government satellite
    programs, accounted for nearly 60% of consolidated revenues.Approximately
    half of funded backlog is related to products for Commercial end-use.
  *In fiscal 2014, bookings based on Frequency's legacy products for both
    U.S. Government and commercial satellites increased substantially.Funded
    backlog at October 31, 2013, rose to $57 million not including
    approximately $20 million of booked orders to be funded subsequent to the
    end of the second quarter.
  *Spending on internal research and development (IR&D) for the six months
    ended October 31, 2013, increased by approximately $600,000 compared to
    the same period of the prior year.These expenditures reflect the
    Company's accelerated IR&D spending on its new expanded product line of
    satellite microwave receivers and up/down converters.
  *Inventory increased by approximately $3 million from the end of the last
    fiscal year primarily in preparation for the production phase of the
    multi-satellite Iridium program as well as for other recent
    bookings.Consuming this inventory will result in increased revenues and
    positive operating cash flow going forward.

Investor Conference Call

As previously announced, the Company will hold a conference call to discuss
these results on Wednesday, December 11, 2013, at 3:00 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,
2014.The archived call may also be retrieved at 1-877-660-6853 (domestic) or
1-201-612-7415 (international) using Postcodes (both are required for
playback): Account: 286, Conference ID #: 13573549.

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 quartz
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,
                          2013      2012      2013      2012
                          (unaudited)
                          (in thousands except per share data)
                                                     
Revenues                   $33,834   $34,254   $17,007   $17,569
Cost of Revenues           21,336    21,541    10,775    10,837
Gross Margin               12,498    12,713    6,232     6,732
Selling and Administrative 7,045     6,996     3,485     3,511
Research and Development   3,226     2,618     1,483     1,203
Operating Profit           2,227     3,099     1,264     2,018
Interest and Other, Net    990       210       897       93
Income before Income Taxes 3,217     3,309     2,161     2,111
Income Tax Provision       1,150     1,100     770       670
Net Income                 $2,067    $2,209    $1,391    $1,441
                                                     
Net Income per Share:                                 
Basic                      $0.24     $0.26     $0.16     $0.17
Diluted                    $0.24     $0.26     $0.16     $0.17
Average Shares Outstanding                            
Basic                      8,504,810 8,389,942 8,519,718 8,401,636
Diluted                    8,780,388 8,573,536 8,821,779 8,603,021
                                                     

                                                                          
Frequency Electronics, Inc. and Subsidiaries                                 
Condensed Consolidated Balance Sheets                                        
                                                                          
                                                      October 31, April 30, 
                                                      2013        2013      
                                                      (in thousands)        
ASSETS                                                                     
Cash & Marketable Securities                           $20,941     $21,730   
Accounts Receivable                                    11,318      7,781     
Costs and Estimated Earningsin Excess of Billings,    5,418       8,617     
net
Inventories                                            40,667      37,521    
Other Current Assets                                   5,652       5,367     
Property, Plant & Equipment                            9,998       8,316     
Other Assets                                           20,014      19,577    
                                                      $114,008    $108,909  
                                                                          
LIABILITIES AND STOCKHOLDERS' EQUITY                                       
Current Liabilities                                    $6,805      $9,327    
Long-term debt                                         10,100      6,000     
Other Long-term Obligations                            11,247      11,130    
Stockholders' Equity                                   85,856      82,452    
                                                      $114,008    $108,909  

CONTACT: Alan Miller, CFO, or
         General Joseph P. Franklin, Chairman:
         TELEPHONE: (516) 794-4500
         WEBSITE: www.frequencyelectronics.com
 
Press spacebar to pause and continue. Press esc to stop.