In This Article:
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Consolidated Revenue: $49.8 million for the nine months ended January 31, 2025, compared to $39.7 million in the prior fiscal year.
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Satellite Program Revenue: $28.8 million or 58% of total revenue, up from $16.3 million or 41% in the prior year.
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Non-Space US Government Revenue: $19.5 million, down from $21.1 million in the prior year.
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Other Commercial Industrial Revenue: $1.5 million, down from $2.3 million in the prior year.
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Gross Margin: Increased compared to the same period in fiscal year 2024.
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SG&A Expenses: Approximately 19% of consolidated revenues for both 2025 and 2024.
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R&D Expenses: Increased to $4.5 million from $2.3 million, representing 9% and 6% of consolidated revenue, respectively.
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Operating Income: $8.5 million, up from $2.5 million in the prior year.
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Pre-Tax Income: Approximately $8.9 million, up from $3 million in the prior year.
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Income Tax Benefit: $11.6 million, including a discrete tax benefit of $11.9 million.
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Net Income: $20.5 million or $2.14 per share, compared to $3 million or $0.32 per share in the prior year.
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Backlog: Approximately $73 million at the end of January 2025, down from $78 million at the previous fiscal year end.
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Working Capital: Approximately $27 million with a current ratio of 2.2 to 1.
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Cash Decrease: $12.8 million decrease since year-end, with $9.6 million due to dividends and $3.2 million related to billing and revenue timing.
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Contract Liabilities: Decreased by $7.4 million quarter-over-quarter and $6.4 million since year-end.
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Debt Status: The company is debt-free.
Release Date: March 13, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
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Frequency Electronics Inc (NASDAQ:FEIM) reported the highest revenue quarter in 10 years, driven by progress on specific programs and conversion of backlog into revenue.
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The company achieved substantial growth in revenue, gross margin, and operating income for both the quarter and year-to-date.
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FEIM's strategic importance in the industry is increasing, with exposure to larger addressable markets such as proliferated satellites and quantum sensing.
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The company has a strong working capital position of approximately $27 million and is debt-free, indicating financial stability.
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FEIM is actively pursuing new business opportunities in both legacy systems and emerging areas like quantum sensors, which could drive future growth.
Negative Points
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There is uncertainty in Washington that could impact future quarters, potentially affecting program timelines and revenue.
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The company's cash position decreased by approximately $12.8 million since year-end, partly due to dividend payments and timing of billings.
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R&D expenses increased significantly, which could pressure margins if not offset by corresponding revenue growth.
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The backlog decreased to $73 million from $78 million at the previous fiscal year-end, indicating potential challenges in securing new contracts.
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FEIM faces competition in the high-reliability area, particularly from companies like Microchip, which could impact market share.