Frequency Electronics Inc. (FEIM, Financial) filed Quarterly Report for the period ended 2011-01-31.
Frequency Electronics Inc. has a market cap of $75.3 million; its shares were traded at around $9.1301 with a P/E ratio of 50.7 and P/S ratio of 1.5.
For the nine and three months ended January 31, 2011, selling and administrative expenses were 22% of consolidated revenues. This is compared to 22% and 21%, respectively, for the same periods of fiscal year 2010. The increase in expenses for the nine and three months ended January 31, 2011 compared to the same periods of fiscal year 2010 is due primarily to increased deferred and incentive compensation expenses resulting from greater profitability and partially offset by a decrease in professional fee expenses. In the final quarter of fiscal year 2011, the Company expects selling and administrative expenses to be incurred at approximately the same rate in both dollars and as a percentage of revenues.
Research and development expenditures represent investments intended to keep the Company s products at the leading edge of time and frequency technology and enhance competitiveness for future revenues. Research and development spending for the nine and three month periods ended January 31, 2011 was 10% of revenues, respectively, compared to 11% and 12% of revenues for the same periods of fiscal year 2010, respectively. R&D spending in fiscal year 2011 continued the development of new satellite payload products, a new family of frequency generators and converters, and new product introductions and improvements in the technology of the Company s GPS-based wireless products and wireline synchronization equipment. In addition, the Company continues to conduct development activities on customer-funded programs the cost of which appears in cost of revenues, thus reducing the level of internal research and development spending. The Company will continue to devote significant resources to develop new products, enhance existing products and implement efficient manufacturing processes. For the last quarter of fiscal year 2011, the Company anticipates that internal research and development spending will be approximately 10% of revenues. Internally generated cash and cash reserves are adequate to fund these development efforts.
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Frequency Electronics Inc. has a market cap of $75.3 million; its shares were traded at around $9.1301 with a P/E ratio of 50.7 and P/S ratio of 1.5.
Highlight of Business Operations:
The increase in revenues for the nine months ended January 31, 2011 compared to the same period of fiscal year 2010, was the result of increased revenue from both U.S. Government/DOD satellite and non-satellite programs partially offset by continuing declines in revenue from wireless infrastructure products recorded in the FEI-NY and FEI-Zyfer segments. Revenues for the three month periods ended January 31, 2011 and 2010, were approximately the same but network infrastructure revenues increased substantially due to increased sales to certain wireless infrastructure OEM s. Revenues from satellite payload programs, which are recorded in the FEI-NY segment, account for one-third of the Company s revenues with U.S. Government space programs increasing 10% year-over-year. However, for the third quarter ended January 31, 2011, the Company recognized less satellite payload revenue than it did in the prior year period. This decrease is primarily attributable to program funding limitations on certain U.S. Government programs. The Company recognizes revenue only to the amounts funded even though it has firm contracts for higher amounts. Revenues from U.S. Government/DOD non-space programs, which are recorded in the FEI-NY and FEI-Zyfer segments, increased approximately 10% year-over-year for the nine months ended January 31, 2011 but decreased by 7% in the third quarter of fiscal year 2011 due to delays in booking new U.S. Government business in FEI-Zyfer. Based on recent new contract awards and anticipated new bookings for both U.S. Government and commercial space applications, the Company expects to realize increased revenues from the satellite payload market area. While the U.S. Government budget process could have a near- term impact on the Company s revenues, the Company s long term view is that this market area will create substantial revenue growth. Similarly, the Company expects to realize continued sales growth in U.S. Government/DOD non-space programs and from wireline telecommunication infrastructure products.For the nine and three months ended January 31, 2011, selling and administrative expenses were 22% of consolidated revenues. This is compared to 22% and 21%, respectively, for the same periods of fiscal year 2010. The increase in expenses for the nine and three months ended January 31, 2011 compared to the same periods of fiscal year 2010 is due primarily to increased deferred and incentive compensation expenses resulting from greater profitability and partially offset by a decrease in professional fee expenses. In the final quarter of fiscal year 2011, the Company expects selling and administrative expenses to be incurred at approximately the same rate in both dollars and as a percentage of revenues.
Research and development expenditures represent investments intended to keep the Company s products at the leading edge of time and frequency technology and enhance competitiveness for future revenues. Research and development spending for the nine and three month periods ended January 31, 2011 was 10% of revenues, respectively, compared to 11% and 12% of revenues for the same periods of fiscal year 2010, respectively. R&D spending in fiscal year 2011 continued the development of new satellite payload products, a new family of frequency generators and converters, and new product introductions and improvements in the technology of the Company s GPS-based wireless products and wireline synchronization equipment. In addition, the Company continues to conduct development activities on customer-funded programs the cost of which appears in cost of revenues, thus reducing the level of internal research and development spending. The Company will continue to devote significant resources to develop new products, enhance existing products and implement efficient manufacturing processes. For the last quarter of fiscal year 2011, the Company anticipates that internal research and development spending will be approximately 10% of revenues. Internally generated cash and cash reserves are adequate to fund these development efforts.
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