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Frequency Electronics(FEIM) - 2024 Q3 - Quarterly Report

Revenue Growth - Revenues for the three months ended January 31, 2024 increased by 29.1% to 13.714millioncomparedto13.714 million compared to 10.620 million in the same period of the prior fiscal year[64] - FEI-NY segment revenues increased by 37.9% to 11.610millionforthethreemonthsendedJanuary31,2024comparedto11.610 million for the three months ended January 31, 2024 compared to 8.420 million in the same period of the prior fiscal year[64] - FEI-Zyfer segment revenues increased by 37.2% to 3.403millionforthethreemonthsendedJanuary31,2024comparedto3.403 million for the three months ended January 31, 2024 compared to 2.480 million in the same period of the prior fiscal year[64] - The significant increase in revenue for the three months ended January 31, 2024 was primarily related to increases in government space sales of approximately 1.8millionfromspaceU.S.Governmentcustomersandapproximately1.8 million from space U.S. Government customers and approximately 1.0 million from non-space U.S. government customers[64] Gross Margin - Gross margin rate decreased to 22.6% for the three months ended January 31, 2024 from 32.6% in the same period of the prior fiscal year due to unanticipated costs associated with new product development[67] - Gross margin rate increased to 31.0% for the nine months ended January 31, 2024 from 13.7% in the same period of the prior fiscal year due to resolution of technical challenges and more efficient program execution[67] Operating Expenses - Selling, general, and administrative expenses increased by 11.1% to 2.619millionforthethreemonthsendedJanuary31,2024comparedto2.619 million for the three months ended January 31, 2024 compared to 2.357 million in the same period of the prior fiscal year[68] - Research and development expenses increased by 22.3% to 958,000forthethreemonthsendedJanuary31,2024comparedto958,000 for the three months ended January 31, 2024 compared to 783,000 in the same period of the prior fiscal year due to a temporary shift in R&D focus[71] Revenue Composition - Revenues from commercial and U.S. Government communication satellite programs accounted for 50% of consolidated revenues for the three months ended January 31, 2024 compared to 47% in the same period of the prior fiscal year[64] - Revenues from non-space U.S. Government/Department of Defense customers accounted for 44% of consolidated revenues for the three months ended January 31, 2024 compared to 47% in the same period of the prior fiscal year[64] Operating Income - Operating income for the three months ended January 31, 2024 decreased by 798,000(245.5798,000 (245.5%) due to a design issue in new product development[72] - Operating income for the nine months ended January 31, 2024 increased by 7.59 million (149.9%) despite the design issue, driven by increased revenue, gross margin, and cost-cutting measures[72] Investment Income - Investment income for the three months ended January 31, 2024 increased by 1.261million(201.81.261 million (201.8%), primarily from a life insurance plan[73] Tax Rate - The company's effective tax rate for the nine months ended January 31, 2024 was 0.6%, compared to (0.1)% in the prior year period[76] Liquidity and Capital Resources - The company's working capital was 24.1 million as of January 31, 2024, with 11.7millionincashandcashequivalents[82]NetcashprovidedbyoperatingactivitiesfortheninemonthsendedJanuary31,2024was11.7 million in cash and cash equivalents[82] - Net cash provided by operating activities for the nine months ended January 31, 2024 was 1.2 million, a decrease from 1.9millionintheprioryearperiod[84]ThecompanysconsolidatedfundedbacklogasofJanuary31,2024was1.9 million in the prior year period[84] - The company's consolidated funded backlog as of January 31, 2024 was 67 million, with 74% expected to be realized in the next twelve months[89] - The company repurchased 4.0millionofitscommonstockoutofa4.0 million of its common stock out of a 5.0 million authorization, with no repurchases in the nine months ended January 31, 2024[87] - The company believes its liquidity is adequate to meet short-term operating and investment needs through at least March 18, 2025[90] R&D and Future Plans - The company plans to continue R&D investments in space applications, guidance systems, and communication systems, with anticipated customer funding and internal cash allocation[88]