Frequency Electronics, Inc. reported earnings per share of 25 cents for the first quarter of fiscal 2025, compared to 22 cents in the same quarter last year.
Revenues rose by 22% year over year, reaching $15.1 million, up from $12.4 million previously.
Frequency Electronics displayed a robust performance for the first quarter of fiscal 2025, marked by revenue expansion, margin growth, and prudent financial management. Despite some softness in government revenues, the strength in satellite payloads and the overall order backlog indicate a positive trajectory for the remainder of the year.
Fiscal Growth Trends
Operating income increased by 15% to $2.4 million, compared to $2.1 million in the same quarter of the prior year. Net income also showed improvement, rising to $2.4 million from $2 million.
The company’s gross margin expanded from $4.9 million in Q1 of fiscal 2024 to $6.7 million in Q1 of fiscal 2025, attributable to enhanced cost management and improved production efficiencies.
While selling and administrative expenses grew, research and development spending also rose significantly, reflecting higher investments in innovation to maintain competitiveness in space-related technologies.
Segment Performance
Satellite Payloads
Revenue from satellite payloads contributed significantly, making up 55% of total revenues at $8.3 million, a notable increase from 39% in the previous year. This surge underscores the growing demand for Frequency Electronics’ space-related offerings.
Non-space U.S. Government/Department of Defense (DOD) Customers
Income from non-space government clients, including the DOD, accounted for 42% of total revenues at $6.3 million, down from 55% in the same quarter of fiscal 2024. The slight decline in government business may signal a shift in product mix.
Other Commercial and Industrial Sales
Revenue from other commercial and industrial sales experienced a minor drop to $0.5 million, representing 4% of total revenue, compared to $0.7 million (5%) a year earlier.
Balance Sheet Insights
As of July 31, 2024, Frequency Electronics held $16.2 million in cash and cash equivalents. Total assets increased slightly to $84.3 million, up from $83.3 million. Contract liabilities decreased while other current liabilities and stockholders’ equity saw changes as well.
Cash Flows and Guidance
Net cash used in operations was $1.5 million in Q1 of fiscal 2025, an improvement from $2.8 million in the prior-year quarter. The company’s CEO expressed confidence in continued growth driven by competitive products and market conditions.
Key Developments
A significant highlight was the declaration of a special cash dividend of $1.00 per share, emphasizing Frequency Electronics’ commitment to rewarding shareholders. The company’s dedication to returning capital underscores its financial stability and shareholder focus.
