• Consolidated Revenue: $55.3 million for fiscal year ended April 30, 2024, compared to $40.7 million in the prior fiscal year.

• Operating Income: $5 million for fiscal year ended April 30, 2024, compared to an operating loss of $4.7 million in the prior fiscal year.

• Net Income: $5.6 million or $0.59 per share for fiscal year ended April 30, 2024, compared to a net loss of $5.5 million or negative $0.59 per share in the prior fiscal year.

• Gross Margin Rate: Increased significantly due to resolution of technical challenges from the prior fiscal year.

• SG&A Expenses: Approximately 18% of consolidated revenue for fiscal year ended April 30, 2024, down from 23% in the prior fiscal year.

• R&D Expenses: $3.4 million for fiscal year ended April 30, 2024, up from $3.1 million in the prior fiscal year.

• Backlog: Approximately $78 million at the end of April 2024, compared to $56 million in the prior fiscal year.

• Working Capital: Approximately $27 million at April 30, 2024, with a current ratio of approximately 1.8 to 1.

• Debt-Free Status: The company remains debt-free.

• Warning! GuruFocus has detected 3 Warning Sign with KOF.

Release Date: July 22, 2024

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Frequency Electronics Inc (NASDAQ:FEIM) reported a significant increase in revenue for the fiscal year ended April 30, 2024, with consolidated revenue reaching $55.3 million compared to $40.7 million in the prior fiscal year.

• The company achieved an operating profit of $5 million for the fiscal year, a substantial improvement from an operating loss of $4.7 million in the previous year.

• FEIM's backlog reached a historic high of $78 million, indicating strong future business prospects.

• The Board of Directors authorized a $1 per share special dividend, reflecting the company's strong cash generation and profitability.

• The company maintains a debt-free balance sheet, providing financial stability and flexibility for future investments.

Negative Points

• The company faces challenges with the evolving satellite industry, particularly the shift towards lower-cost, easily replaceable satellite hardware, which may involve higher risk and potentially lower gross margins.

• There is uncertainty in the satellite industry regarding the balance between cost and reliability, which could impact FEIM's ability to maintain high margins.

• The company's results may fluctuate quarter-over-quarter due to the nature of its business, making it difficult to predict future performance based on a single quarter.

• FEIM's participation in new, riskier satellite programs could lead to financial challenges if not managed carefully.

• The company faces competition in the market for precision timing technologies, which could impact its market share and profitability.