Frequency Electronics, Inc. (NASDAQ:FEIM)

Frequency Electronics, Inc. (NASDAQ:FEIM) ($58.62; $573.2M market cap) announced new contract wins:

• Received approximately $6.0 million in contracts across two core Assured-PNT business areas:
  • Secure communications systems
  • Time, frequency, and synchronization distribution systems for airborne avionics equipment
• Contracts support tactical data link communication systems and aircraft signal distribution systems
• Reinforces FEI-Zyfer’s role in supporting military and enforcement operations through high-precision, mission-critical solutions

Management Commentary:

"We are pleased that we are a trusted supplier for these mission-critical business areas. Ongoing contracts for tactical data link communication systems and for aircraft signal distribution systems are a testament to the quality and precision of our products and the value we provide to our customers. They also reflect the growing demand for data-intensive secure information exchange in support of current military and enforcement operations, and the need for transparent system interoperability between military and agency participants." — Tom McClelland, President and CEO

Our Quick Take:

While it is nice to see a couple of small contract wins in the past few weeks, given the tremendous move the stock has had, we think it may need larger wins to get the stock moving higher. 

Frequency Electronics, Inc. designs and manufactures precision time and frequency control products and GPS-based systems for satellite communications, secure government and commercial communications, and telecommunication infrastructure.

Fourth Quarter 2012 Results

• Revenues for the fourth quarter 2012 were $17.1 million vs $15.9 million in the prior year quarter.
• NON-GAAP earnings per share for the fourth quarter $0.21 ($0.14 fully taxed) vs $0.13 ($0.08 fully taxed) in prior year quarter.

Commenting on the Company's performance and business outlook, Chairman of the Board General Joseph Franklin stated: "We are very pleased to have achieved this substantial increase in revenues and profitability for fiscal 2012. The outlook for this year, fiscal 2013, is excellent for both the US Government/DOD and Commercial sectors based on our pipeline of present recurring business and multiple long-term programs already under contract. In addition, we expect the acquisition of Elcom, completed in the final quarter of fiscal 2012, to be accretive this year. Opportunities for new business are also expanding as a result of the military's need to derive greater performance with less incremental cost by upgrading existing systems instead of funding new platforms. FEI's proprietary technology is a key element that supports the mission of "doing more with less." We are looking forward to another very good year and continued growth in fiscal 2013."