Frequency Electronics (FEIM) Q4 2024 earnings summary

Executive summary

• Fiscal year 2024 revenue rose 36% year-over-year to $55.3 million, with a $5 million operating profit after a prior year loss.

• Net income for FY2024 was $5.6 million ($0.59/share) versus a net loss of $5.5 million ($-0.59/share) in FY2023.

• Backlog at fiscal year-end hit a record $78 million, up from $57 million a year earlier, supporting a positive near-term outlook.

• Special $1 per share cash dividend authorized, the second in 18 months, to be paid August 29, 2024, reflecting strong cash generation and a debt-free balance sheet.

• Q4 revenue was $15.6 million, up from $13.0 million in Q4 2023, and Q4 net income was $2.6 million ($0.28/share).

Financial highlights

• Consolidated revenue for FY2024 was $55.3 million, up from $40.7 million year-over-year.

• Gross margin for FY2024 was $18.6 million, up from $7.8 million in FY2023, with a significant rate increase due to resolution of prior technical challenges.

• Net cash provided by operating activities was $8.7 million in FY2024, up from $1.2 million in FY2023.

• Total assets at year-end were $85.6 million, up from $74.5 million at April 30, 2023.

• SG&A expenses were 18% of revenue, down from 23% year-over-year.

Outlook and guidance

• Management anticipates continued growth in new business and sustained profitability for FY2025, supported by a strong backlog and improved margins.

• Backlog expected to remain strong, with continued growth in space, navigation, secure communication, and timing markets.

• Gross margins expected to remain around 40%, with potential to push higher on traditional programs but lower on newer, riskier contracts.

• R&D investment anticipated to stay in line with or above historical levels.

• Positive trajectory expected due to disciplined management and a fortified product offering.