In This Story
Frequency Electronics Inc. (FEIM+0.06%) has submitted its 10-Q filing for the quarterly period ended October 31, 2024.
The filing includes financial statements for the quarter, showing an increase in revenues to $15.8 million from $13.6 million in the same quarter the previous year. The increase is attributed to higher sales to U.S. Government space customers.
Cost of revenues for the quarter was $8.2 million, representing 52% of sales, compared to 68% in the same quarter of the previous year. This decrease in cost ratio is due to a higher gross margin from completed milestones in space programs.
The company reported a gross margin of $7.6 million for the quarter, compared to $4.3 million in the previous year, with the increase attributed to improved efficiency and completion of high-margin programs.
Selling, general, and administrative expenses increased to $3.4 million from $2.6 million, primarily due to increased payroll and costs related to a company event.
Research and development expenses increased to $1.6 million from $0.8 million, reflecting continued investment in product development.
Operating income for the quarter was $2.6 million, up from $0.9 million in the previous year. The increase is due to higher revenues and improved gross margins.
Net income for the quarter was $2.7 million, up from $0.8 million in the previous year. The effective tax rate for the quarter was 5.0%, reflecting a valuation allowance against deferred tax assets.
Cash provided by operating activities was $2.4 million, while cash used in investing activities was $0.8 million, primarily for the purchase of property, plant, and equipment.
Frequency Electronics had a working capital of $23.4 million as of October 31, 2024. The company anticipates that internally generated cash will be adequate to fund future research and development efforts.
The filing also details a material weakness in internal controls over financial reporting related to the calculation of loss provision accruals, which the company is in the process of remediating.
Frequency Electronics continues to focus on its core markets, including communication satellites and U.S. Government defense programs, and reports a funded backlog of approximately $81 million.
This content was summarized by generative artificial intelligence using public filings retrieved from SEC.gov. The original data was derived from the Frequency Electronics Inc. quarterly 10-Q report dated December 16, 2024. To report an error, please email earnings@qz.com.