Frequency Electronics (FEIM) Says Financial Results Will Reflect Significant Subsidiary Adjustments

Frequency Electronics, Inc. (NASDAQ: FEIM) intends to file its 10K for fiscal year 2017 ended April 30, 2017 before the end of July 2017. Prior to that filing Frequency Electronics Inc. (FEI) will issue a press release and schedule a conference call covering Q4 and year end 2017 results.

Over time FEI’s wire-line network infrastructure business has declined. Strategic focus is now on the larger business areas of secure communications, command and control, and satellite systems. In the upcoming report Frequency intends to present financial results for Gilliam FEI, the Company’s Belgium subsidiary, (a provider of wire-line, copper based, network infrastructure products), as “Held for Sale/Discontinued Operations” as of April 30, 2017. Accordingly FEI expects to record required book adjustments along with any related deferred taxes. In addition the Company expects to record substantial non cash inventory reserves of not less than $6M comprising for the most part a full reserve of FEI-Zyfer inventory of wire-line copper based synchronization products. The Company also is engaged in steps to consolidate corporate wide DOD and foreign Government marketing with its domestic subsidiaries FEI-Elcom and FEI-Zyfer as they share common customers.

Commenting on these changes, Joel Girsky, Chairman of the Board of Directors said: “The recent long downturn in satellite business notwithstanding, never before in our history has FEI addressed a higher level of market opportunities. These opportunities are in secure communications, command and control and satellite systems. We are acting to capitalize on these opportunities and we enjoy a competitive edge. Secure communications and command and control, for which precision time is essential, has become a Homeland Security and DOD urgent priority. Satellite payloads, both additional and necessary replacements, after the current industry wide trough, will incorporate new technology in which we already have a head start. Our plan this year going forward is to use our engineering resources to make sure we are fully prepared with the capabilities and products required to gain market share. We will also maintain our domestic corporate-wide production capacity to serve present customers and to demonstrate credible rapid scalability for on time delivery and growth.”

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