Executive Summary
            
                Frequency Electronics reported a robust Q4 2024, marked by meaningful topline growth, improved profitability, and a historic backlog of $78 million. Revenue for the quarter was $15.576 million, delivering a gross margin of 40.3% and operating income of $2.494 million (16.0% of revenue), culminating in net income of $2.625 million ($0.28 per share). Full-year results for the year ended April 30, 2024 show consolidated revenue of $55.3 million with a net income of $5.6 million and a fully funded backlog of approximately $78 million, up from $56 million in the prior fiscal year. The company ended the year in a strong liquidity position, generating $7.48 million of operating cash flow and $6.66 million of free cash flow, with cash of $18.32 million and net cash of approximately $12.1 million (net debt negative). Management framed the outlook around continued growth in core end markets—space, navigation, secure communication and timing—while acknowledging the evolving, higher-risk, lower-margin opportunities in next-generation, lower-cost satellites. The Board also authorized a $1 per share special dividend, underscoring a capital-allocation stance supported by sustained cash generation and a debt-free/low-leverage balance sheet. The near-term trajectory remains positive, but execution discipline and margin management will be critical as FEIM balances traditional high-margin programs with the competitive pressures of new, lower-cost satellite architectures.            
         
        
        
            Key Performance Indicators
            
                                    
                                    
                        
                        
                                                    
                                QoQ: 102.35% | YoY:55.51%                            
                                             
                                    
                        
                        
                                                    
                                QoQ: 627.27% | YoY:536.22%                            
                                             
                                    
                        
                        
                                                    
                                QoQ: 1 919.23% | YoY:967.07%                            
                                             
                                    
                        
                        
                                                    
                                QoQ: 1 928.99% | YoY:964.64%                            
                                             
                             
         
        
        
        
        
            Key Insights
            
                
                                    Revenue: Q4 2024 revenue of $15.576 million, up 19.78% year over year and 13.58% quarter over quarter. Gross profit: $6.281 million; gross margin 40.3% (0.403). YoY gross profit up 55.5%; QoQ up 102.35%. Operating income: $2.494 million; operating margin 16.0% (0.160). YoY operating income up 536.22%; QoQ up 627.27%. Net income: $2.625 million; net margin 16.85% (0.169). YoY net income up 967.07%; QoQ up 1919.23%. EPS: $0.28 (basic and diluted) with YoY growth of ~964.64% and QoQ growth of ~1928...
                
             
         
    
    
    
        
        
            Financial Highlights
            
                Revenue: Q4 2024 revenue of $15.576 million, up 19.78% year over year and 13.58% quarter over quarter. Gross profit: $6.281 million; gross margin 40.3% (0.403). YoY gross profit up 55.5%; QoQ up 102.35%. Operating income: $2.494 million; operating margin 16.0% (0.160). YoY operating income up 536.22%; QoQ up 627.27%. Net income: $2.625 million; net margin 16.85% (0.169). YoY net income up 967.07%; QoQ up 1919.23%. EPS: $0.28 (basic and diluted) with YoY growth of ~964.64% and QoQ growth of ~1928.99%. Backlog: End of April 2024 backlog was $78 million (historic high) vs. ~$56 million prior year; cash flow: Net cash provided by operating activities $7.482 million; free cash flow $6.661 million; capex $0.821 million; cash at end of period $18.32 million; net debt position: net cash of approximately $12.14 million (net debt negative). Balance sheet health: Total assets $85.64 million; total liabilities $45.82 million; total stockholders’ equity $39.82 million; current ratio ~1.82; cash ratio ~0.55. Efficiency and liquidity indicators remain favorable with solid ROA (~3.07%), ROE (~6.59%), and ROCE (~4.75%).            
            
            Income Statement
            
                
                    
                    
                        | Metric | 
                        Value | 
                        YoY Change | 
                        QoQ Change | 
                    
                    
                    
                                                
                                | Revenue | 
                                15.58M | 
                                19.78% | 
                                13.58% | 
                            
                                                    
                                | Gross Profit | 
                                6.28M | 
                                55.51% | 
                                102.35% | 
                            
                                                    
                                | Operating Income | 
                                2.49M | 
                                536.22% | 
                                627.27% | 
                            
                                                    
                                | Net Income | 
                                2.63M | 
                                967.07% | 
                                1 919.23% | 
                            
                                                    
                                | EPS | 
                                0.28 | 
                                964.64% | 
                                1 928.99% | 
                            
                                            
                
             
         
        
        
            Key Financial Ratios
            
                                    
                    
                                    
                    
                                    
                    
                        
                            operatingProfitMargin                        
                        
                            16%                        
                        
                                                    
                     
                                    
                    
                                    
                    
                                    
                    
                                    
                    
                                    
                    
                        
                            operatingCashFlowPerShare                        
                        
                            $0.79                        
                        
                                                    
                     
                                    
                    
                        
                            freeCashFlowPerShare                        
                        
                            $0.7                        
                        
                                                    
                     
                                    
                    
                                    
                    
                             
         
        
        
    
    
    
        
            Management Commentary
            
                Key management insights from the FEIM earnings call and Q&A: 
- Strategy and growth trajectory: 'Revenues have grown consistently throughout the year and we expect that to continue in the near term' and 'backlog of $78 million is a historic high for the company and we anticipate the backlog will remain strong based on a very healthy new business outlook' (Thomas McClelland). Significance: FEIM is positioning for continued revenue growth anchored by a robust pipeline and a favorable mix of legacy, high-margin programs and selective higher-risk, new programs that could expand future addressable markets. 
- Capital allocation and shareholder value: 'Board of Directors authorized a $1 per share special dividend' signaling a proactive capital-return stance amid strong cash generation; management characterized this as potentially non-recurring as cash generation evolves. Significance: Positive for near-term equity holder returns but suggests investors should assess whether higher recurring dividends are intended in the future. 
- Margin and program mix dynamics: 'Two categories: traditional programs with potential 50% gross margins' and 'new programs with cost pressures, lower margins, and higher risk' (Thomas McClelland). Significance: Profitability will depend on the mix of high-margin traditional programs versus lower-margin, higher-risk newer programs tied to the shift toward lower-cost satellite hardware. 
- Execution and schedule: 'Zyfer is back on schedule' and 'there are times when results will fluctuate quarter to quarter' (Tom McClelland, Steve Bernstein). Significance: Ongoing project execution discipline is critical to sustain margin recovery and backlog realization. 
- Balance sheet and liquidity: 'The company is debt free' as stated by management, and 'the liquidity is adequate to meet operating and investing needs for the next 12 months' (Steve Bernstein). Significance: FEIM’s balance sheet strength provides flexibility to pursue growth opportunities and absorb margin volatility.            
            
            
                
                    Backlog of $78 million is a historic high for the company and we anticipate the backlog will remain strong based on a very healthy new business outlook.
                    — Thomas McClelland
                 
                
                    the company is debt free.
                    — Steve Bernstein
                 
             
         
        
        
            Forward Guidance
            
                Near-term outlook reflects a sustained growth trajectory supported by a record backlog and ongoing investments in next-generation capabilities. Management emphasized that revenues have grown consistently and expect that trend to continue in the near term, with a robust backlog underpinning future revenue recognition. However, they cautioned that the satellite market is transitioning toward smaller, cheaper platforms, which can compress gross margins and introduce execution risk as design-for-cost decisions compete with performance targets. The company targets high margins on traditional programs (historically around 50% on certain programs) while acknowledging that newer, cost-competitive programs may offer lower margins until scale and reliability efficiencies improve. No formal revenue guidance was disclosed; the emphasis is on backlog strength, profitability improvement path, and continued cash generation. Key factors investors should monitor include: (1) backlog-to-revenue conversion pace and program mix shifts between FEINY and FEIZyfer segments, (2) progression of new, lower-cost satellite programs and their impact on gross margins, (3) ongoing R&D investment alignment with historic commitments, and (4) capital allocation cadence, including potential future dividends or share repurchases contingent on cash flow resilience.