Frequency Electronics, Inc. (FEIM) Q1 2025 Earnings Call Transcript
Revenue $15.1 million (up 22% year-over-year from $12.4 million); increase attributed to higher sales from U.S. Government satellite programs.
Operating Income $2.4 million (up 15% year-over-year from $2.1 million); increase due to higher revenue and gross margin percent, offset by higher R&D spend.
Gross Margin 44% (highest in 24 years, up from 31% year-over-year); increase due to resolution of technical challenges and completion of smaller jobs at higher margins.
SG&A Expenses Approximately 19% of consolidated revenues; increase attributed to higher payroll-related expenses.
R&D Expenses $1.5 million (up from $506,000 year-over-year); increase due to focus on modernization of products, with expectations of quarterly variability.
Net Income $2.4 million or $0.25 per share (up from $2 million or $0.22 per share year-over-year); increase attributed to higher revenue and gross margin.
Backlog $70 million (down from $78 million at the end of the previous fiscal year); still represents a historically high value for the company.
Working Capital Position Approximately $21 million; current ratio of approximately 1.5 to 1, indicating a strong liquidity position.
Tax Provision $133,000 (up from $7,000 year-over-year); increase due to California's different rules on NOLs.
Pre-tax Income Approximately $2.5 million (up from $2.1 million year-over-year); increase attributed to various sources including investment income.
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Frequency Electronics Secures New Contracts for Precision Oscillators
- Significant Contract Value: Frequency Electronics has secured follow-on contracts from a major aerospace company valued at approximately $6 million, with additional contracts anticipated within three months worth over $2 million, indicating strong ongoing demand for its core technologies in mission-critical government programs.
- Technological Edge: The precision Oven-controlled Quartz Oscillators utilize the company's patented technology to operate reliably in high dynamic environments, ensuring critical performance for the Link 16 system and reinforcing the company's leadership in high-precision timing and frequency control markets.
- Broad Market Applications: Frequency Electronics' products are utilized not only in satellite payloads but also across commercial, government, and military systems, including C4ISR, electronic warfare, and UAVs, showcasing its market penetration in multiple critical sectors.
- Ongoing R&D Investment: The company invests significant resources in research and development to expand its capabilities and markets, aiming to transform laboratory discoveries into practical applications, thereby ensuring a competitive edge in the future.
RH Reports Robust Q3 Sales, Aligns with Canopy Growth, Tilray Brands, Frequency Electronics, and Other Major Stocks Rising on Friday
U.S. Stock Market Performance: U.S. stocks declined, with the Nasdaq Composite dropping over 400 points on Friday, while RH shares rose 5.8% after reporting better-than-expected quarterly revenue but missing earnings estimates.
Significant Stock Gains: Several stocks saw notable gains, including TryHard Holdings Ltd (+57.2%), Canopy Growth Corp (+35.4%), and Tilray Brands Inc (+28.4%), largely driven by expectations of relaxed federal marijuana regulations under President Trump.
Lululemon's Strong Performance: Lululemon Athletica Inc gained 10.1% after exceeding third-quarter estimates, raising full-year guidance, and announcing a CEO succession plan along with an increase in its share buyback program.
Other Notable Stock Movements: Companies like Rivian Automotive Inc and Clear Secure Inc also experienced significant gains, with Rivian entering the autonomous driving sector and Clear Secure receiving an upgrade from JP Morgan.
