Q3 2021 Frequency Electronics Inc Earnings Call

March 11, 2021

[music].

Greetings and welcome to the frequency electronics third quarter fiscal year 2021 earnings release conference call. At this time all participants are in a listen only mode. A brief question and answer session will follow the formal presentation.

If anyone should require operator assistance during the conference. Please press star zero on your telephone keypad.

As a reminder, this conference is being recorded.

Any statements made by the company during this conference call regarding the future constitute forward looking statements pursuant to the Safe Harbor provisions of the private Securities Litigation Reform Act of 1995, such statements inherently involve uncertainties that could cause actual results to differ materially from the forward look.

And statements factor.

Factors that would cause or contribute to such differences are included in the company's press release.

And are further detailed in the company's periodic report filings with the Securities and Exchange Commission by making these forward looking statements. The company undertakes no obligation to update to update these statements for revisions or changes after the date of this conference call.

It is now my pleasure to introduce your host Stanton Sloane President and CEO.

Thank you.

Hello, everyone. Thank you for joining us today.

Like to make a few comments about the quarter and the state of the business and then we will turn things over to Steve to take you through the financial details.

Following that we'll take some questions.

Let me start by saying that I'm very pleased with the general direction of the business and in particular, our significant success, capturing new contracts for space systems.

<unk> unique capability to deliver high performance and high reliability timing and frequency generation systems that can operate and this difficult environment is our core competency.

U S government investments and new space programs are producing an increasing number of opportunities for Fai, resulting in a growing backlog and improving revenues that we're seeing and the New York operation.

We did see some customer and supply chain COVID-19 related issues, and our El Carmen XI for subsidiaries and Q3, which impacted their revenues and gross margins.

We had a very solid quarter for new business at <unk>, and New York with backlog up by $5 million to date from the end of last fiscal year and we have won several key opportunities not to mention the $17 million contract Award we announced on February 24th after the end of the quarter.

Bookings and our New York Operation through the end of Q3 were $53 million.

One of the best year to date performance new business wins in company history.

This amount is not fully funded but it is on contract.

Consistent with our past practices, we only report funded amounts and our backlog.

Our performance on new business bodes well for increasing revenue going forward and as we've said before increasing revenue is a very good leading indicator for improving margins.

We also generated significant cash of $9 million through Q3 and are debt free.

Hiring is continuing as we ramp up to meet anticipated engineering and production commitments associated with these new contracts.

Space represents a rapidly expanding opportunity for us and ensuring we deploy shareholders' capital towards continually improving operational efficiency and advancing our product technologies will continue to remain a focus for us.

We will also continue to monitor and address the COVID-19 situation and I want to thank our employees for their extraordinary efforts and maintaining <unk> customer commitments over this past year.

With that let me turn it over to Stephen will go through some financial details and then we'll take your questions Steve. Thank.

Thank you Stan and good afternoon.

For the nine months ended January 31, 2021, consolidated revenue was $38 6 million up 24% compared to $31 3 million for the same period of the price.

Yes.

And the components of revenue are as follows revenue from commercial and U S. Government satellite programs was $20 1 million compared to $14 7 million for the same period on the prior fiscal year and accounted for approximately 52% of consolidated revenue compared to 47% for the same period of the prior fiscal year.

Air.

Revenue on satellite payload contracts are recognized primarily under the percentage of completion method on a recorded only and the <unk>.

New York segment.

Revenues from non space U S government and Dod customers, which are recorded and both the FBI, New York and <unk> segments were $16 3 million compared to $12 7 million and the same period of the prior fiscal year and accounted for approximately 42% of consolidated revenue compared to 41 person.

<unk> for the prior fiscal year on.

The commercial and industrial revenues were $2 2 million compared to $3 9 million and the prior fiscal year.

Intersegment revenues are eliminated in consolidation.

For the nine months period, ending January 31, 2021, gross margin and gross margin rate increased significantly as compared to the same period and fiscal year 'twenty. The increase in gross margin and gross margin rate was due to several programs identified and prior periods that had higher engineering costs incurred.

That were and the development phase that have since been completed or are near completion.

For the nine months, ending January 31, 21, and 'twenty selling and administrative expenses were approximately 25% and 27% respectively of consolidated revenues. The increase in SG&A expense was mainly due to an increase and professional fees relating to litigation.

R&D expense for the nine months ending January 31, 'twenty, one and 2000 and decreased to $3 5 million from $4 8 million a decrease of $1 3 million and were 9% and 15% of consolidated revenue.

The company's R&D expense decreased year over year as previous R&D efforts have ended and turned into production. However, the company plans to continue to invest in R&D to keep its products at the state of the art.

For the nine months ended January 31, 2021, the company recorded an operating loss of $1 1 million compared to $7 3 million and the prior year on.

Our operating loss has made a significant improvement from the same period of the prior fiscal year and reflects improvement in revenues gross margin and gross margin rate based upon our bookings and backlog we are expecting this improving trend to continue.

Other income consisted primarily investment income derived from the company's holdings of marketable securities for the nine months period, ending January 31, 2021 investment income included 105000, all dividend from Morion compared to a $250000 dividend from oriented and the same period and fiscal.

<unk>.

This yields pre tax loss of approximately 695000 compared to a pre tax loss of approximately $7 million for the prior year.

For the nine months ending January 31, 2021, the company recorded a tax provision of 37000 compared to 48000 for the same period of fiscal 'twenty.

Consolidated loss for the nine months ending January 31, 2021 was 732000 or <unk> <unk> per diluted share compared to a consolidated net loss of $7 1 million or <unk> 78 per diluted share in the previous year.

Our fully funded backlog at the end of January 2021 was approximately $41 million up approximately $5 million from the previous year and April 30th 20, the company's balance sheet continues to reflect our strong working capital position of approximately $39 million at January 31, 21, and a current ratio.

Oh of approximately $6 six to one. Additionally, the company is debt free the company believes that its liquidity is adequate to meet its operating and investing needs for the next 12 months in the foreseeable future I will turn the call back to stand and we look forward to your questions.

Thank you Steve So we will turn this over to the operator will explain how to get your questions and we.

We ask you to please limit to one question. Thank you.

Anastasia.

Thank you at this time, we will be conducting a question and answer session.

I would like to ask a question. Please press star one on your telephone keypad, a confirmation tone will indicate your line is and the question queue.

You May press Star two if you would like to remove yourself from the question queue.

For participants using for participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys, one moment, please while we poll for questions.

Yes.

Once again, if you have a question please press star one.

The first question comes from Michael Eisner, a private Investor. Please go ahead.

Hi.

Outcomes revenue that would be part of the New York area.

Correct consolidated with New York.

Alright, so how bad was the Covid in <unk> last quarter, you did bake.

Those three and $5 million and revenue.

So.

We've had some employees I think the.

The way to think about Covid, though is not just.

About our employees, although we have had a few folks.

And it did have.

But.

It's causing some supply chain issues and all.

And so some delays from.

Administrative delays and some of the customers and processing contracts.

Some of that slipped from what was anticipated in the quarter.

<unk>.

It's on the anticipated of course and.

And people working remotely sometimes cause administrative slowdowns.

Is it going to be pushed into the fourth quarter.

So it will be pushed Havent lost anything we have not lost any.

And he contracts is just things are slipping on the rate schedules are being delayed.

So.

Your revenue dropped for the core but mostly it was because of the <unk>.

And the supply chain and outcome.

Because of delays.

Yes, and it will be.

So that's why you had the lower revenue alright.

I guess I had one question next thing thank you.

Sure.

The next question comes from Sam <unk> with SCR asset management. Please go ahead.

Yes.

<unk> backlog, which was $41 million Didnt think the 17 billion and contract is this a more profitable contract and.

Are we doing a lot more business with our backlog we further.

The increase and the next quarter due to this.

$17 million.

So on it so we would anticipate that it will be of course keep in mind debt.

Only put into backlog what's funded.

So we might win.

A large contract and.

Mike.

Before.

Let's say for $17 million.

But if it totally funded debt.

And then we only put a dollar and the.

And the backlog that's why one of dimension.

The performance on the new business side.

My comments.

So if youre trying to do the arithmetic.

And you can't really do it that way but.

Obviously, if you have $17 million contract, we would expect barring some unusual circumstances that would convert the backlog.

Is this new customer or is this.

Reported revenue.

Okay, it's a customer that we've been doing business with for many years.

Okay. Thank you.

Sure.

Once again, if you have a question please press star one.

The next question comes from Brett Reiss with Janney Montgomery Scott. Please go ahead.

Hi, Stan.

Okay.

The.

Hiring youre looking to do can you just kind of describe as an engineer salespeople just the nature of the type of hiring.

Right now, it's mostly engineering and in manufacturing.

We.

I think we've added something like 20 people. So far this year and I have another 15 or 17 opening so.

It's mostly technical folks or are.

On the manufacturing floor or test.

We think the skill sets you're looking for Youll have any trouble filling those positions.

And as always.

Always challenging to get.

Competent and <unk>.

<unk> people, but we've done pretty good this year like I said, we've heard about 'twenty.

And.

And on the manufacturing side also keep in mind that we have the ability to outsource manufacturing and its a little bit easier.

And the engineering side so.

I expect we will keep up with things and I don't think its going to be a problem.

I'll drop back in queue. Thank you for answering my questions.

Yep.

The next question comes from Michael Eisner, a private Investor. Please go ahead.

Hi.

The last about half dozen releases all pertain to.

<unk> is that part of GPS III and <unk> four.

Well, it's part of everything I mean, thats, our core business here is principally oscillators and related electronics.

Well, then house GPS III coming along.

Doing really well the quality unit is performing exceptionally well.

And.

<unk> got very good customer feedback the other day on it so I think that's go on.

Swimmingly.

And when do you think it will go into production.

And as we get on order.

We are doing.

And you saw the announcement for the two units those are actually.

Evaluation units.

When you say production you mean.

Fully flight qualified.

For the GPS III satellite so the first the first part of that is getting the units qualified and we got that was the nature of the announcement that we made a few weeks ago.

And which on what day it was accurate.

And I don't remember.

There was the announcement for digital Rebidding metallic clocks.

Alright.

Thank you.

Yes.

The next question comes from Walter <unk>, a private Investor. Please go ahead.

Yes, hi.

There are multiple stack acquiring space and satellite companies with multibillion dollar valuations, they all seem to be and <unk>.

And with satellite et cetera, and to net from space et cetera are you optimistic that some of those billions might eventually be headed your way.

Well sure we compete and.

And the commercial marketplace as well.

And we periodically bid on those jobs.

Sure we'll win some of them so yes.

Alright, thank you.

The next question comes from Brett Reiss with Janney Montgomery Scott. Please go ahead.

I Stat, and I know you can't comment on the merits.

Of the of the lawsuit, but where do we stand has a trial date and set.

What and when.

We hope this thing and unless it's settled comes to win and.

Very hard for me to speculate its and the courts and.

I really have no insight as to how long theyre going to take but.

We're hoping it's resolved soon.

Okay alright, thank you.

Once again, if you have a question please press star one.

The next question comes from Walter <unk>, a private Investor. Please go ahead.

Yes, Hi, Kathy would have off investments.

And hence to establish a space.

Exploration fund.

And your company might be applicable to a fund like that.

Not sure what you mean, the political our products, if you're talking about space exploration well.

We produced a variety of products that are used by NASA. For example, we have products on the.

Going back to the Voyager spacecraft, which is still operating as our oscillators on it.

Electronics on various Nash NASA missions, including the Mars.

Orbiter space station.

You name it so.

From from that point of view, yes, we'd be very applicable.

Okay. So maybe.

Phil.

You and mind.

Thank you.

Sure.

The next question comes from Michael Eisner Private Investor. Please go ahead on <unk>.

What's the bids outstanding.

Total youre, asking and total dollars of outstanding debt.

Im not quite sure today, because I have to subtract.

Some of these.

Some of these awards so.

I would expect it's probably not a lot different and what I told you last time, yes, it's typical puts and takes to debt.

One and I think $600 million of something yes.

And I think it was around somewhere between six and 650, if I remember the last call.

Alright, thank you.

The next question comes from Sam or bought SKU with SCR asset management. Please go ahead.

Yes.

And you presented frequency.

And at a conference recently, how did that go do we expect research.

Do we expect to present day to any other.

The conference.

And the near future.

Yes, I think you're referring to Needham.

So yes.

Yes, so well.

We anticipate further research and we get various conversations I'm not aware of anybody that's pointing to pick up research on us right now but.

We periodically get calls discuss that with folks.

And.

Do we expect the higher and Investor relations firm and soon so to tell our story because the backlog seems to be improving.

That seems to it is.

The significant okay.

So at the moment, Steve and I are the Investor relations folks so.

At least for the immediate future will handle it.

Okay, great good luck.

Thank you.

The next question comes from Joel Girsky, a private Investor. Please go ahead.

Good afternoon, and Stan and Steve Congratulations on the quarter one.

One question came from Janney Montgomery already and the concerns of the block suite and.

On your last quarterly compensation, Stan you mentioned and how much would have been better or not for owners legal fees and Steve just mentioned that the professional fees are up can you. Please tell us now.

What our professional fees are as they relate to the block suite.

And so that we can get an estimate as to how much more improved our cooperations bottom line will be.

And when this show and just finally.

And at whatever that timeframe is obviously.

Yes, we're not positioned to disclose that number Joe.

The number of restaurant, how many dollars have been spent but correct.

Can you tell us whether the insurance company has paid any percentage on the legal fees.

Yes, they have.

And would you can you tell us what percentage.

We can't.

And you gave me the SG&A numbers the legal expenses are in there so alright.

Alright, I don't know if they are identified as legal expenses versus.

SG&A share.

And stay healthy Steve you stay healthy also thank you.

Thank you Joe.

The next question comes from Walter Stem and private Investor. Please go ahead.

Hi regarding atomic clocks.

And I don't really know that much about are you on liberty to mention.

And competitor and that category.

And well, there's depending on whether you're talking about and the U S or worldwide. There's a lot of people with.

Globally that produce Tom and clocks, and Europe, Russia and China.

And then and the U S.

So.

So it's a list of people.

And the United States.

<unk> produces atomic clocks and geez I don't know there is probably 20 or.

15% or 20, other folks have produced atomic clocks, and Thats, a pretty broad category.

Stuff when you say atomic clocks generally so it includes laboratory instruments, all sorts of things will be classified as atomic clocks.

I see but for satellite referring too.

Yes go on.

And to satellite.

Yes, so we do and they are not our own.

There are many competitors and that.

Arena.

No. There's a few there's only.

It depends on if you're talking about rubidium atomic clocks, theres too and the U S awesome.

<unk> sales.

Okay, and Rebidding and Amy.

Rebidding and Mr type used for satellite.

Various.

And we say atomic clocks that would include Mercury ion rubidium cesium.

And there are variations of those things offline and space at the moment.

Most of what is being procured. These days is rubidium, we talked about space atomic clocks.

There are some mercury and clocks that are associated with some of the NASA missions theirs and experimental clock called the deep space Atomic clock, which is mercury young on clock, which is.

It was launched I think last year, which as NASA. So it just depends.

Particular applications you are talking about.

Well they are talking about satellites for Internet communications from space that require rubidium atomic clock.

And on the satellite architecture, but.

Not necessarily some of that can be done with the precision correlates oscillator.

I see alright, thank you very much.

You bet.

Ladies and gentlemen, we have reached the end of the question and answer session and I would like to turn the call back to Stanton Sloane for any closing remarks.

And again, thank you everybody for joining the call today, we will look forward to talking to you next quarter. Thank you goodbye.

This concludes Tonight's conference you may disconnect your lines at this time. Thank you for your participation.

And.

[music].

And.

[music].

Okay.

[music].

And.

Yes.

[music].

And.

[music].

And then.

[music].

Okay.

And.

[music].

Okay.

[music].

And.

Right.

And.

[music].

Thanks.

Okay.

Thank you.

And.

[music].

And.

[music].

Okay.

[music].

And.

[music].

And.

Great.

[music].

Okay.

[music].

Sure.

Yes.

[music].

Okay.

Yes.

Okay.

[music].

Okay.

Thanks.

Okay.

And.

Okay.

And.

Okay.

[music] weighted.

Total.

[music].

Thanks.

Okay.

And then.

Thank you.

Okay.

Thank you.

Yes.

And.

And then.

Okay.

[music].

Okay.

Yes.

On this.

[music].

Okay.

Yes.

Okay.

Thank you.

[music] guidance.

And.

Okay.

[music].

Okay.

And.

Thanks.

Yes.

Okay.

And.

Okay.

And.

Okay.

[music] and.

Thank you.

Sure.

Right.

[music].

Okay.

Yes.

Okay.

[music].

Okay.

And.

Yes.

[music].

And.

Thanks.

[music].

Okay.

Yes.

Okay.

Right.

[music].

Thank you.

Okay.

On the screen.

[music].

Greetings and welcome to the frequency electronics third quarter fiscal year 2021 earnings release Conference call.

At this time all participants are in a listen only mode.

A brief question and answer session will follow the formal presentation.

If anyone should require operator assistance during the conference. Please press star zero on your telephone keypad.

And as a reminder, this conference is being recorded.

Statements.

Factors that would cause or contribute to such differences are included and the company's press release.

These statements for revisions or changes after the date of this conference call.

It is now my pleasure to introduce your host Stanton Sloane President and CEO.

Thank you.

Hello, everyone. Thank you for joining us today.

I'd like to make a few comments about the quarter and the state of the business and then we'll turn things over to Steve to take you through the financial details.

Following and that will take some questions.

Let me start by saying that I'm very pleased with the general direction of the business and in particular, our significant success, capturing new contracts for space systems.

<unk> unique capability to deliver high performance and high reliability timing and frequency generation systems that can operate and this difficult environment is our core competency.

U S government investments and new space programs are producing an increasing number of opportunities for FBI, resulting in a growing backlog and improving revenues that we're seeing and the New York operation.

We did see some customer and supply chain COVID-19 related issues, and our El Com and XI for subsidiaries and Q3, which impacted their revenues and gross margins.

Bookings and our New York Operation through the end of Q3 were $53 million.

One of the best year to date performance new business wins in company history.

This amount is not fully funded but it is on contract.

Consistent with our past practices, we only report funded amounts and our backlog.

Our performance on new business bodes well for increasing revenue going forward.

And as we've said before increasing revenue is a very good leading indicator for improving margins.

We also generated significant cash of $9 million through Q3 and are debt free.

Hiring is continuing as we ramp up to meet anticipated engineering and production commitments associated with these new contracts.

We will also continue to monitor and address the COVID-19 situation and.

And I want to thank our employees for their extraordinary efforts and maintaining <unk> customer commitments over this past year.

With that let me turn it over to Stephen will go through some financial details and then we will take your questions Steve.

Thank you Stan and good afternoon.

For the nine months ended January 31, 2021, consolidated revenue was $38 6 million up 24% compared to $31 3 million for the same period of the price.

Sure.

And the components of revenue are as follows revenue from commercial and U S. Government satellite programs was $20 1 million compared to $14 7 million for the same period of the prior fiscal year and accounted for approximately 52% of consolidated revenue compared to 47% for the same period of the prior fiscal year.

Here.

Revenue on satellite payload contracts are recognized primarily under percentage of completion method and are recorded only and the New York segment.

<unk> for the prior fiscal year.

Marshall and industrial revenues were $2 2 million compared to $3 9 million and the prior fiscal year intersegment revenues are eliminated in consolidation.

And the development phase that have since been completed or are near completion.

For the nine months, ending January 31, 21, and 'twenty selling and administrative expenses were approximately 25% and 27% respectively of consolidated revenues.

The increase in SG&A expense was mainly due to an increase and professional fees relating to litigation.

R&D expense for the nine months ending January 31, 21, and 'twenty decreased to $3 5 million from $4 8 million a decrease of $1 3 million and were 9% and 15% of consolidated revenue.

For the nine months ended January 31, 2021, the company recorded an operating loss of $1 1 million compared to $7 3 million and the prior year.

Operating loss has made a significant improvement from the same period of the prior fiscal year and reflects improvement in revenues gross margin and gross margin rate based upon our bookings and backlog we are expecting this improving trend to continue.

Other income consisted primarily investment income derived from the company's holdings of marketable securities for the nine months period, ending January 31, 2021 investment income included 105000, all the dividends from Morion compared to a 250000 all dividend from oriented and the same period in fiscal 'twenty.

This yields pre tax loss of approximately 695000 compared to a pre tax loss of approximately $7 million for the prior year.

For the nine months ending January 31, 2021, the company recorded a tax provision of 37000 compared to 48000 for the same period of fiscal 'twenty.

Consolidated loss from the nine months ending January 31, 2021 was 732000 or <unk> <unk> per diluted share compared to a consolidated net loss of $7 1 million or <unk> 78 per diluted share in the previous year.

Our fully funded backlog at the end of January 2021 was approximately $41 million up approximately $5 million from the previous year and April 30th 20. The Companys balance sheet continues to reflect a strong working capital position of approximately $39 million at January 31, 21, and a current ratio.

Share of approximately six 6% to one. Additionally, the company is debt free and the company believes that its liquidity is adequate to meet its operating and investing needs for the next 12 months and the foreseeable future I will turn the call back to Stan and we look forward to your questions.

Thank you Steve So we'll turn this over to the operator will explain how to get to your questions and we.

We ask you to please limit it to one question. Thank you.

Anastasia.

Thank you at this time, we will be conducting a question and answer session.

I would like to ask a question. Please press star one on your telephone keypad, a confirmation tone will indicate your line is and the question queue. You May Press Star two if you would like to remove yourself from the question queue.

For participants using for participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys, one moment, please while we.

Paul for questions.

Yes.

Once again, if you have a question please press star one.

The first question comes from Michael Eisner, a private Investor. Please go ahead.

Hi.

Outcomes revenue that would be part of the New York area.

That's correct consolidated with New York.

Alright, so how bad was the Covid in <unk> last quarter, you did like almost $3 5 million and revenue.

So.

And we've had some employees I think the way to think about Covid, though it is not just.

About our employees, although we have had a few folks.

And it did have.

But it is causing some supply chain issues and also some delays from.

Administrative delays and some of the customers and processing there their contracts.

So some of that slipped from what was anticipated in the quarter.

<unk>.

It's.

On the anticipated of course and.

People working remotely sometimes cause administrative slowdowns.

And as it couldnt be pushed into the fourth quarter.

So it will be pushed they havent lost anything we have not lost any.

And the contracts is just things are slipping to the right schedules are being delayed.

So.

Ah.

Your revenue dropped for the cooler and mostly because of.

The supply chain and outcomes.

Because of delays.

Yes, and it will be.

So that's why you had the lower revenue alright.

I guess I had one question next thing thank you.

Sure.

The next question comes from Sam Rybacki with SCR asset management. Please go ahead.

Yes.

The backlog, which was $41 million Didnt think the 17 billion and contract is this a more profitable contract and.

Are we doing a lot more business, while our backlog we further.

The increase and the next quarter due to this.

$17 million.

So on it so we would anticipate.

Dissipate debt it will be of course keep in mind debt, we only put into backlog what's funded.

So we might win.

Large contract and.

That might be.

Before.

Let's say for $17 million.

But if it totally funded debt a dollar that we only put a dollar and.

And the backlog and that's why I wanted dimension.

And the performance on the new business side and.

And my comments.

So that if you're trying to do the arithmetic.

You can't really do it that way, but on.

Obviously, if you have $17 million contract, we would expect barring some unusual circumstance that debt would convert the backlog.

Is this new customer or is this.

And now it's an existing customer.

Okay, it's a customer that we've been doing business with for many years.

Okay. Thank you.

Sure.

And.

Once again, if you have a question please press star one.

The next question comes from Brett Reiss with Janney Montgomery Scott. Please go ahead.

Hi, stent and.

Alright.

The.

Hiring youre looking to do can you just kind of describe as it engineers sales people just just the nature of the type of hiring right.

Right now, it's mostly engineering and in manufacturing.

And we.

I think we've added something like 20 people. So far this year and I have another 15 or 17 opening so we're.

<unk> technical folks or.

And we're on the manufacturing floor or test.

And we think the skill sets you're looking for Youll have any trouble filling those positions.

And as always.

Always challenging to get.

Competent and experienced people, but we've done pretty good this year and like I said, we've hired about 20.

And.

And on the manufacturing side also keep in mind that we have the ability to outsource manufacturing and it's a little bit easier.

And the engineering side so.

And I expect we will keep up with things and I don't think its going to be a problem.

And I'll drop back in queue. Thank you for and.

And through my questions.

Okay.

The next question comes from Michael Eisner, a private Investor. Please go ahead hi.

Yes.

The last half dozen releases all pertain to.

Oscillators is that part of GPS III and <unk>.

Well, it's part of everything I mean, thats, our core business here is principally oscillators and related electronics.

More than house GPS to be coming along.

Doing really well.

Quality unit is performing exceptionally well.

And we've got very good customer feedback the other day on it so I think thats going on.

Swimmingly.

When do you think it will go into production.

And then as we get an order.

We are doing.

And you saw the announcement for the two units those those are actually.

Evaluation units I think when you say production you mean.

Fully flight qualified.

For the GPS III satellite so the first the first part of that is getting the units qualified and we got that was the nature of the announcement that we made a few weeks ago.

And which on what day, it was actually and a couple of them and.

And I don't remember.

It was the announcement for digital Rebidding metallic clocks.

Alright. Thank.

Thank you.

Yes.

The next question comes from Walter <unk>, a private Investor. Please go ahead.

Yes, hi.

There are multiple spacs acquiring space and satellite companies with multibillion dollar valuations they all seem to be <unk>.

And with satellite et cetera, and connect from space et cetera are you optimistic that some of those billions might eventually be headed your way.

Well sure.

Compete and.

And the commercial marketplace as well.

And we periodically bid on those jobs.

Sure we will win some of them so yes.

Alright, thank you.

The next question comes from Brett Reiss with Janney Montgomery Scott. Please go ahead.

I Stat, and I know you can't comment on the merits of the lawsuit, but where do we stand has a trial date and set.

And what and when.

And might we hope this thing.

And unless it's settled comes to win and.

Very hard for me to speculate its and the courts and.

And I really have no insight as to how long theyre going to take but we're hoping it's resolved soon.

Okay alright, thank you.

Once again, if you have a question please press star one.

The next question comes from Walter <unk>, a private Investor. Please go ahead.

Yes, Hi, Kathy would have off investments.

And hence to establish a space.

Operations Fund.

You think your company might be applicable.

Through a fund like that.

Not sure what you mean, the political our products, if you're talking about space exploration.

And we produced a variety of products that are used by NASA. For example, we have products on the.

Going back to the Voyager spacecraft, which is still operating as our oscillators on it.

Electronics on various Nash NASA missions, including the Mars.

Orbiter space station.

And you name it so.

From from that point of view, yes, we'd be very applicable.

Okay. So maybe.

And he'll keep.

And you in mind.

Thank you.

Sure.

The next question comes from Michael Eisner Private Investor. Please go ahead.

What's the bids outstanding.

Total youre asking total dollar of outstanding debt.

And.

I'm not quite sure today, because I have to subtract.

Some of these.

Some of these awards so.

I would expect it's probably not a lot different and what I told you last time, yes, typical puts and takes to debt.

And I think $600 million of something yes, I think it was around somewhere between six and 650, if I remember the last call.

Alright, thank you.

The next question comes from Sam or bought SKU with SCR asset management. Please go ahead.

Yeah.

You presented frequency.

On a conference recently, how did that go do we expect research.

And do we expect to present day to any.

The conference.

And the near future.

Yes, I think you're referring to Needham.

And so yes, yes.

So it went well.

And.

We anticipate further research and we get various conversations I'm not aware of anybody that's pointing to pick up research on us right now but.

And we periodically get calls discuss that with folks.

And do we expect the higher and Investor relations firm soon.

And tell our story because the backlog seems to be improving.

That seems to it is pretty significantly okay.

No.

Steve and I are the Investor relations folks so.

At least for the immediate future will handle it.

Okay great.

Look.

Thank you.

The next question comes from Joel Girsky, a private Investor. Please go ahead.

Good afternoon, and Stan and Steve.

Congratulations on the quarter, one and one question came from Janney Montgomery already and it concerns the block suite and.

On your last quarterly conversation, Stan you mentioned and how much would have been better or not for owners and legal fees and Steve just mentioned Thats and professional fees are up can you. Please tell us now what.

Our professional fees are as they relate to the block suite.

So that we can get an estimate as to how much more improved our cooperations bottom line will be.

And when this soon just finally.

And at whatever that timeframe is obviously.

Yes, we're not and are positioned to disclose that number Joe.

The number as to how many dollars have been spent correct.

Can you tell us whether the insurance company has paid any percentage on the legal fees.

Yes, they have.

And would you can you tell us what percentage.

No we can't.

And you gave me the SG&A numbers the legal expenses are in there so alright.

Alright, I don't know if theyre identified as legal expenses versus.

SG&A.

And stay healthy Steve you stay healthy also thank you.

Thank you Joe.

The next question comes from Walter Stem and private Investor. Please go ahead.

Hi regarding atomic clocks.

And that I don't really know that much about are you at liberty to mention.

And competitor and that category.

And depending on whether you're talking about and the U S or worldwide. There is a lot of people that globally that produced helmet clocks, and Europe, Russia and China.

And and.

And then and the U S. So.

So it's a list of people.

And in the United States.

<unk> produces atomic clocks and geez I don't know it was probably 20 or.

15, or 20, other folks have produced atomic clocks, and Thats, a pretty broad category.

Stuff when you say atomic clocks generally so it includes laboratory instruments, all sorts of things will be classified as atomic clocks.

I see but for satellites.

Moving to.

Yes.

Glad to satellite.

Yes, so we do and they are not on.

There are many competitors and that.

Arena.

No. There is there is few theres only.

It depends on if you're talking about rubidium atomic clocks, theres too and the us us and.

And I think the on the company's et sales.

Okay, and Rebidding and.

Rebidding and Mr type used for satellite.

Various.

And we say atomic clocks that would include Mercury ion rubidium cesium.

And there are variations of those things offline and space at the moment.

Most of what is being procured. These days is rubidium, we talk about space atomic clocks.

There are some mercury and clocks that are associated with some of the NASA missions Theres, an experimental clock called the deep space atomic clock, which is mercury I on clock, which is.

It was launched I think last year, which as NASA. So it just depends.

Particular application Youre talking about.

Well they are talking about satellites for internet communication from space that require rubidium atomic clock.

And on the satellite architecture, but.

Not necessarily some of that can be done with the precision correlates oscillator.

I see alright, thank you very much.

You bet.

Ladies and gentlemen, we have reached the end of the question and answer session and I would like to turn the call back to Stanton Sloane for any closing remarks.

Again, thank you everybody for joining the call today, we will look forward to talking to you next quarter. Thank you goodbye.

This concludes Tonight's conference you may disconnect your lines at this time. Thank you for your participation.

Q3 2021 Frequency Electronics Inc Earnings Call

Request a DemoDemo

FEIM

Frequency Electronics

Earnings