Frequency Electronics Q3 Revenue Falls 10.6%, Backlog Soars to $83M
Frequency Electronics reported Q3 revenue of $16.9 million, down from $18.9 million year-over-year, with net income plunging to $1.6 million ($0.16/share) from $15.4 million ($1.60/share). Gross margin rate fell as SG&A rose to 21% of sales, while backlog hit a record $83 million, targeting over $100 million soon.
1. Q3 Financial Results
Frequency Electronics reported Q3 revenue of $16.9 million, down from $18.9 million year-over-year. Operating income fell to $1.3 million from $3.5 million and net income dropped to $1.6 million ($0.16/share) versus $15.4 million ($1.60/share) prior year.
2. Expense and Margin Trends
Gross margin and gross margin rate declined due to a shift toward lower-margin satellite programs, while SG&A expenses rose to 21% of consolidated revenue from 18%. R&D and facility investments in Colorado contributed to higher operating costs.
3. Backlog and Contracts
Backlog reached a record $83 million with management targeting over $100 million soon. Two new contracts valued at $45 million will enter the backlog in the current fiscal quarter, boosting future revenue visibility.
4. Future Growth Initiatives
The company is investing in alternative position, navigation, and timing systems and expects significant revenue growth from the TURbO program over the next few quarters. Defense program expansions are anticipated with increased government satellite deployments.