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Edited Transcript of FEIM earnings conference call or presentation 25-Jul-18 8:30pm GMT

Full Year 2018 Frequency Electronics Inc Earnings Call

Aug 1, 2018 (Thomson StreetEvents) -- Edited Transcript of Frequency Electronics Inc earnings conference call or presentation Wednesday, July 25, 2018 at 8:30:00pm GMT

TEXT version of Transcript

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Corporate Participants

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* Martin B. Bloch

Frequency Electronics, Inc. - Executive Chairman & Chief Scientist

* Stanton David Sloane

Frequency Electronics, Inc. - President, CEO, COO & Director

* Steven L. Bernstein

Frequency Electronics, Inc. - CFO

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Conference Call Participants

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* Brett Reiss

* J Steven Emerson

Emerson Investment Group - Founder

* Sam Rebotsky

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Presentation

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Operator [1]

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Greetings, and welcome to the Frequency Electronics Year-End 2018 Earnings Release Conference Call. (Operator Instructions) 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-looking statements. 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 these statements for revisions or changes after the date of this conference call.

It is now my pleasure to introduce your host, Martin Bloch, Executive Chairman of the Board of Frequency Electronics. Please go ahead, sir.

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Martin B. Bloch, Frequency Electronics, Inc. - Executive Chairman & Chief Scientist [2]

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Thank you. Welcome, everybody. I have with me, Steve Bernstein and Stan Sloane. And I will first turn over the agenda to Steve Bernstein to give us the financial highlights for fiscal 2018.

Steve, please proceed.

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Steven L. Bernstein, Frequency Electronics, Inc. - CFO [3]

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Thank you, Martin. Good afternoon. In our 2018 10-K and financial reports, the results of Gillam-FEI for fiscal years ending April 30, 2018 and 2017 are presented as discontinued operations. Unless otherwise stated, financial results discussed on this call refer to continuing operations.

Fiscal 2018 revenues were $39.4 million compared to $50.4 million in the previous fiscal year, a decline of $11 million over the same period of fiscal 2017, which was largely due to the reduced revenue from commercial and U.S. Government satellite programs.

Revenues from the satellite market are recorded in the FEI-New York segment and represent approximately 36% of consolidated revenues compared to approximately 45% in fiscal 2017.

Revenues from non-space U.S. Government/DOD customers, which are recorded in both the FEI-New York and FEI-Zyfer segments, accounted for approximately 45% of consolidated revenues compared to approximately 38% in fiscal 2017.

Other commercial and industrial revenues in the fiscal year 2018 period accounted for approximately 19% of consolidated revenues compared to 17% in the prior year.

For the year ended April 30, 2018, gross margin and gross margin rate both decreased compared to the prior year. The lower gross profit and percentage is the result of lower revenues, increased repair charges, unabsorbed manufacturing overhead costs and a $5.6 million of inventory adjustments.

In the fiscal years ended April 30, 2018 and '17, selling and administrative expenses decreased from $11.9 million to $10.6 million and were approximately 27% and 24% respectively of consolidated revenues. The majority of the reduction occurred in corporate, deferred comp expense, professional fees and stock option expense.

During fiscal 2018, the company continued its accelerated research and development activity. As a percentage of consolidated revenue, R&D spending for the years ended April 30, 2018 and '17 were approximately 18% and 14%, respectively. These R&D efforts address large business opportunities in secure communication, command and control, and satellite systems that require advanced technologies and capabilities going forward. The company believes it enjoys a competitive edge and has a head start in the development of these technologies.

The operating loss was approximately $12.4 million compared to $7.5 million last year, for the most part due to the decline in revenues.

Other income generally consists of investment income, offset by interest and other expenses. Other income included a gain of approximately $1.1 million recognized in the first quarter of fiscal '18, in which the company divested its holdings in equity securities. Prior year other income included $577,000 of income from interest and dividends compared to $220,000 of interest and dividends in the current year. This yields a pretax loss of $11.2 million compared to pretax loss of $7 million for the same period last year.

The tax provision for income tax is an expense of $11.2 million compared to a benefit of $2.1 million for the same period last year. The current year tax expense of $11.2 million is primarily related to the impact of the recent U.S. tax reform and the establishment of a valuation allowance against the U.S. deferred tax assets. There is no current tax liability for Frequency to pay.

The company reported a consolidated net loss from continuing operations for fiscal '18 of $22.5 million or $2.54 per diluted share, compared to a loss of $4.9 million or $0.56 per diluted share for fiscal '17. The reported net loss from continuing operations was impacted substantially by noncash and onetime charges totaling approximately $16.8 million. Loss from discontinued operations was $967,000 or $0.53 per diluted share compared to income of $103,000 or $0.01 per diluted share for fiscal '17 net of taxes. Additionally, the company reported a loss on the sale of Gillam of approximately $360,000.

Accordingly, the company reported a consolidated net loss in fiscal '18 of $23.8 million or $2.69 per diluted share compared to a net loss of $4.8 million or $0.55 per diluted share for the prior year.

Our fully funded backlog at the end of April 30, 2018 was $30 million compared to $16 million at the end of last quarter and $28 million at the end of fiscal '17. The company anticipates a significant increase in bookings during the balance of the current and the ensuing fiscal year.

For the fiscal year ended April 30, 2018, the company generated $3.3 million positive cash flow from operations. Frequency continues to maintain a very strong balance sheet with a working capital position of over $47 million.

Cash position increased to $14 million at April 30, 2018, up from $10 million at the beginning of the fiscal year. 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 Martin, and we look forward to your questions later.

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Martin B. Bloch, Frequency Electronics, Inc. - Executive Chairman & Chief Scientist [4]

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Welcome back, everybody. Just -- I want to -- I'm sure most of you have read the press release, but to -- for clarity, Stan Sloane was elected President and Chief Executive Officer as of May 1, 2018, and I migrated to Executive Chairman and Chief Scientist. And I'm sure this is for the best future growth of the company.

I'd like to turn this over now to Stan Sloane, and then I'll make a few remarks and open the session to questions and answers.

Stan, please proceed.

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Stanton David Sloane, Frequency Electronics, Inc. - President, CEO, COO & Director [5]

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Thanks, Martin. Fiscal year 2018 was pivotal for FEI. We had to deal with lingering slowdown in satellite procurement, resulting lower revenues as Steve talked about. We reduced inventory, sold one subsidiary, started the process of winding down and divesting another, and consolidated manufacturing operations. While addressing these operating items, we also maintained a robust R&D program, continuing our legacy of developing state-of-the-art technologies. We continue to deliver on our contracts and meet customer expectations, effectively managed our finances, resulting in a strong cash position and 0 debt balance sheet.

We also booked the largest contract in company history, won contracts for several other key satellite programs and picked up initial development contracts for several non-space DOD programs that, while small-dollar value initially, had the potential for significant follow-on production. The outlook for future business has never been brighter. I'm confident we'll see these actions pay off in terms of improving financial performance and future growth.

With that, I will turn it back over to Martin.

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Martin B. Bloch, Frequency Electronics, Inc. - Executive Chairman & Chief Scientist [6]

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Okay. I'll just make a few remarks which I think are appropriate. Frequency as well as our customers were hit by the perfect storm in years 2016, 2017 and '18, and this is a total change in the concept of what the commercial satellite industry will look like, from satellites that were designed to last 20 years and have very steady technology, to the concept of having satellite last 5 to 8 years in order to be able to insert new technology and to take advantage of the lower launch cost that has happened in the past couple of years.

At the same time, the military satellites also dragged their feet in deciding in which direction and which programs to fund. All of this resulted in us being able to book a lot less, and of course, ship a lot less.

However, we didn't sit idly during that time. We focused on reassessing what technologies require the most emphasis, and we invested in technologies that have the greatest payback for the future. The first result of this investment is that development of the next generation of atomic clocks are for space and terrestrial application, which is, in addition to being the largest single contract we've ever booked, it has also enormous potential on future revenues, both for satellites and for the secure communication market.

FEI's technology are basically having low-noise systems from DC to microwave enables us to address the satellites as well as the DOD business, which Stan Sloane is taking an active role in helping to pursue it with a vengeance on this. Then secure time that we have developed is the most crucial part in the future to minimize the jamming and spoofing that our adversaries can easily do. And then the immediate cure is precision time. If you have precision time, you can identify if you are being spoofed or jammed, and you also have the capability of holdover so you can navigate for short periods of time and communicate for long periods of time during the stress levels.

Earlier this year, we projected that we're going to book $50 million worth of new contracts during calendar 2018. I'm happy to report that we exceeded that in the first 6 months of 2018, and we still have one of many more opportunities before the calendar 2018.

With this emphasis, I am very confident that Frequency Electronics will be able to capture more programs and produce profitable growth, both in revenue and in the bottom line.

And with this, I'd like to turn over the conference to questions. And please address the question to either Steve, me or Stan Sloane. Thank you.

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Questions and Answers

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Operator [1]

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(Operator Instructions) Our first question today is coming from Steve Emerson from Emerson Investment Group.

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J Steven Emerson, Emerson Investment Group - Founder [2]

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Yes. I greatly appreciate any help you can give us in possible guidance range for this year's revenue and any other metrics. The quarters have been all over the waterfront this last year. It looks like Q4 was $18 million versus $12 million, Q4 '17. So again, any help you can give us, ranges or any other metrics, would be greatly appreciated.

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Martin B. Bloch, Frequency Electronics, Inc. - Executive Chairman & Chief Scientist [3]

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Steve, this is Martin. It's been the tradition of Frequency of not to give exact guidance, but I can give you the general view. We expect our revenue for fiscal 2019 to increase considerably above the revenue of 2018, and we expect the year to be profitable.

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Operator [4]

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(Operator Instructions) Our next question today is coming from Sam Rebotsky from SER Asset Management.

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Sam Rebotsky, [5]

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Now I'm not happy like I'm sure everybody else on the call is. Let's see if we can make us happy as we go to the new year. Now your backlog is at $50 million as of April 30, because I believe it was $28 million as of 2017? And what is the backlog as of now? And how much of this backlog do you expect to be in the next year, the $50 million that you talk about?

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Martin B. Bloch, Frequency Electronics, Inc. - Executive Chairman & Chief Scientist [6]

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Okay, I just want to tell you, I want to differentiate. Our back -- our funded backlog at the end of 2000 -- of...

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Steven L. Bernstein, Frequency Electronics, Inc. - CFO [7]

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'17.

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Martin B. Bloch, Frequency Electronics, Inc. - Executive Chairman & Chief Scientist [8]

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2017, less 3 months. Well, I think it's simple to explain. Our funded backlog is $30 million.

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Steven L. Bernstein, Frequency Electronics, Inc. - CFO [9]

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As of year -- as of April 30.

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Martin B. Bloch, Frequency Electronics, Inc. - Executive Chairman & Chief Scientist [10]

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As of April 30, and there's been additional increases involved. Now let's not confuse that with the new bookings because we only put in backlog what is funded. So if we get, for example, a $20 million contract but the initial funding is only $10 million, we're only putting in backlog of $10 million. So I would say that, that's our backlog, and we expect the backlog in fiscal 2019 to increase because of the additional bookings on this. One other thing I want to bring to your attention. I'm sorry that the company had difficulty in revenue and losses, but there's one fact that you have to realize, that we didn't sit down on our tush and wait for heaven. Thus we invested enormous amounts of time in new products on this and perfecting all the products to be able to capture this large contract. And what's equally important is we did a great job in maintaining our cash. And our cash is $4 million higher than a year ago. We had $10 million at the end of fiscal 2017, and we ended up with $14 million at the end of 2018. So we invested in research to be able to capture new programs, and we, at the same time, preserved the cash. And the key technologies, moving into the future, that I see the greatest opportunity and need is precision time and low g sensitivity, precision time for satellites and stationary positions and precision time including low g technology for all the mobile markets. So I hope you're a little bit happier.

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Sam Rebotsky, [11]

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Okay. Now let me just clarify. The -- last year, the funded backlog was $28 million as of April 30, 2017. April 30, 2018, the funded backlog is $30 million. The $50 million as of July, what percentage of this $50 million is funded? Is there any increase in the funded backlog? And when do we expect funding as relative to these bookings? And as far as revenue for the year, do we expect to increase the ability to do $50 million revenue? Because the funded you talked about of $30 million, I assume you expect to complete that in the current fiscal year. Do you expect to complete any other bookings in the current fiscal?

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Martin B. Bloch, Frequency Electronics, Inc. - Executive Chairman & Chief Scientist [12]

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An affirmative yes. And I just want to tell you, many of the programs, especially DOD contract, and if you get a contract for $37 million at this point, and I think the initial funding was $8 million, right?

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Steven L. Bernstein, Frequency Electronics, Inc. - CFO [13]

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Yes.

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Martin B. Bloch, Frequency Electronics, Inc. - Executive Chairman & Chief Scientist [14]

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Because they incrementally increase the fund as we use it up. The same is applicable to most of the DOD satellite programs on this. You get the contract and you get the initial funding and the add-on as you need. We have 3 such programs that are very significant that they incrementally add to the funding. So we expect to be able to do a significant increase over that $40 million in revenue we did in fiscal 2018 with a $30 million funded backlog plus the additional funding we expect to get.

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Sam Rebotsky, [15]

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Okay. Do we expect to -- if they've funded $8 million out of the $37 million, by the time - the way you're operating, do you expect to be to the $37 million by April 30, 2019? So this unfunded will become funded? Or what is a rational number for us to use? And the contracts you're bidding on, do you expect other increases that will go into revenue, not all of it, but how much might go into revenue of what you...

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Martin B. Bloch, Frequency Electronics, Inc. - Executive Chairman & Chief Scientist [16]

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The answer to additional contract, the answer is absolutely yes. Now I don't know exactly. I don't have the contract in front on what the funding profile is, but on that contract, there's enormous incentive of doing things as quickly as possible. So funding is not going to be an issue. The issue on that is to finish that development to achieve the results of better frequency, stability and precision. So the faster we move, the faster we get funded on this program. There's no issue in getting funding on it. It's asked to move the development as quickly as we can.

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Sam Rebotsky, [17]

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Okay. As far as the tax valuation allowance, last year, it was $3,290,000, I assume with the disallowance of your tax loss. What is the valuation allowance as of April 30 now?

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Steven L. Bernstein, Frequency Electronics, Inc. - CFO [18]

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The valuation allowance is the full valuation. Approximately $11.2 million is the expense. The valuation allowance itself, I think, is a little higher, about $12 million.

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Sam Rebotsky, [19]

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$12 million. Okay, okay. All right. So $12 million. And let's see. Now it appears that you needed -- in other words, do we -- could we indicate -- it's July 25; we have another 6 days before July 31. What kind of sales or what kind of range are we talking about for the first quarter?

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Martin B. Bloch, Frequency Electronics, Inc. - Executive Chairman & Chief Scientist [20]

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Sam, you should know this after 50 years, that we don't give guidance.

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Sam Rebotsky, [21]

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Is it going to be proportionally higher or lower relative to the quarters going forward?

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Martin B. Bloch, Frequency Electronics, Inc. - Executive Chairman & Chief Scientist [22]

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I believe it's going to be higher. But I did not -- I want to be the first one that I did not examine the details.

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Sam Rebotsky, [23]

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Okay, okay.

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Martin B. Bloch, Frequency Electronics, Inc. - Executive Chairman & Chief Scientist [24]

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We're doing much better, but visualize, the emphasis is the new product development and not only a significant incremental future increase in revenue.

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Sam Rebotsky, [25]

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Okay. I'm going to make one recommendation before I come out of the queue and come back in. During the past years, the stock -- I mean, the office and directors, other than Edenbrook, really have not bought any significant amount of stock. Your stock is trading at the low. I mean, Privet basically has been selling their stock. They got below 5%, and I assume they've been selling. I really would like to see the office and the directors with the stock trading here to look at their -- in their heart and their wallets and sort of commit some money to the stock and make believe that they're not just going to get directors' fees but they really know that Frequency is turning around, and they're ready to pony up some money.

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Martin B. Bloch, Frequency Electronics, Inc. - Executive Chairman & Chief Scientist [26]

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Sam, sounds like a good recommendation. I promise to carry it to each director.

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Operator [27]

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(Operator Instructions) Our next question today is coming from [Michael Eisner], a private investor.

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Unidentified Participant, [28]

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How is -- is Zyfer continuing its growth?

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Martin B. Bloch, Frequency Electronics, Inc. - Executive Chairman & Chief Scientist [29]

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Zyfer is doing very well, and they have the mission of taking their precision time that's made at FEI-New York and integrating it into systems and installing those systems in secure communication sites. And that's moving forward very, very well.

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Unidentified Participant, [30]

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All right, great. And one more question. You did -- you have like $50 million in bookings in the first 6 months of -- in new bookings in the 6 months of calendar 2018. Can you give a comment on year-end 2018, what you hope to be at in bookings?

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Martin B. Bloch, Frequency Electronics, Inc. - Executive Chairman & Chief Scientist [31]

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In 2019, you mean?

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Unidentified Participant, [32]

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No, 2018. Not fiscal, calendar, because your -- yes, calendar.

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Martin B. Bloch, Frequency Electronics, Inc. - Executive Chairman & Chief Scientist [33]

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We have quite a lot of new contracts in play and it's going to be significant. It's not going to be the kind of scarcity that the previous year, that we booked like $3 million on this. We have lots of contracts into play. It looks bright.

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Unidentified Participant, [34]

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You're seeing some visibility finally after all these years?

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Martin B. Bloch, Frequency Electronics, Inc. - Executive Chairman & Chief Scientist [35]

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Definitely.

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Operator [36]

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Your next question is a follow-up from Sam Rebotsky.

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Sam Rebotsky, [37]

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I'm back, Martin. I'm back better than ever. Now Asia, you're talking about divesting. As far as I can see China and South Korea had about $2 million sales last year, so what kind of assets and when do we divest it? What does it depend on? What's the assets we're carrying? Do we take a loss? Do we...

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Martin B. Bloch, Frequency Electronics, Inc. - Executive Chairman & Chief Scientist [38]

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Yes. Whatever it is, we want to -- we have no more need for the China facility. We established it during the build-out of the cellular telephony, where both Motorola and Lucent at that time established manufacturing facility in Tianjin and they basically insisted that we have a place right nearby them to supply the timing modules. And just for historical purposes, we supplied 150,000 rubidium clocks to the buildup of the cellular telephony. Now there is no need for it, and our plan is to divest it as soon as we can.

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Sam Rebotsky, [39]

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So we do we take a gain or a loss?

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Martin B. Bloch, Frequency Electronics, Inc. - Executive Chairman & Chief Scientist [40]

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Probably going to be a small loss.

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Sam Rebotsky, [41]

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Small loss. Okay. And do we see the need or the ability to look at things with Stan at the helm to guarantee better sales and profits, to make an acquisition? To what extent are we looking at things? Does it make sense that we're seeing, or so we can have a plan that we could be profitable, at least on a quarter-to-quarter basis. And we don't get stuck with any inventory, and that we know what we're looking and building, that we don't build anything we're not going to need. So what's our possibility so we can be profitable? And one other thing, you've spoken of all the cybersecurity. Are we generating revenue from cybersecurity? And where does this revenue go for cybersecurities? How does that go forward?

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Martin B. Bloch, Frequency Electronics, Inc. - Executive Chairman & Chief Scientist [42]

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Okay. Well, let me take on this, on the secure communication. There's a combination of the timing portion being built in New York and the wraparound electronics being built at FEI-Zyfer and installed into the field. That basically is one of the very important elements of the build-out, of being able to do secure communication on this and not to be dependent on GPS synchronization only. So that's moving very fast. I think the U.S. government is now realizing how crucial it is and how vulnerable we are and how fast we have to implement it. Maybe you have some input in Trump's administration to tell him to really make decisions, because the need is there and the technology to do the early part of the safeguarding is available. So we look very promising at that area.

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Sam Rebotsky, [43]

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So have we generated revenue in cybersecurity yet?

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Martin B. Bloch, Frequency Electronics, Inc. - Executive Chairman & Chief Scientist [44]

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Yes.

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Sam Rebotsky, [45]

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Yes, okay. How many employees do we have currently? And how do we have at the end of the -- either employees at April 30, compared to January 31? By consolidating, do we have less employees? And do we have enough of what we need, so that going forward, we can put everybody to work and be profitable?

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Martin B. Bloch, Frequency Electronics, Inc. - Executive Chairman & Chief Scientist [46]

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Go ahead, Stan.

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Stanton David Sloane, Frequency Electronics, Inc. - President, CEO, COO & Director [47]

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So roughly a little over 300, roughly 150 in New York. The consolidation did reduce some overhead-related costs, and that should be reflected going forward. We also, right now, are in the process of hiring because all the additional contract work we have requires additional people. So the total employment number is going to increase.

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Sam Rebotsky, [48]

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Okay. Okay, all right. Look, hopefully, we can make people happy because -- can Edenbrook buy any more stock? Or are they allowed to?

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Martin B. Bloch, Frequency Electronics, Inc. - Executive Chairman & Chief Scientist [49]

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I think they're allowed to tomorrow.

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Sam Rebotsky, [50]

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All right, good, good, good.

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Martin B. Bloch, Frequency Electronics, Inc. - Executive Chairman & Chief Scientist [51]

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Yes, I have to check the rules. I'm not...

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Sam Rebotsky, [52]

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All right. Check the rules, and check if everybody you know we gave out some options. It would be nice that people take their own money and buy the stock whenever they could buy because I think there's no more stuff that's in -- that everybody should know what you know. So it's all out in the public now, so...

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Martin B. Bloch, Frequency Electronics, Inc. - Executive Chairman & Chief Scientist [53]

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Absolutely. We'll do what we can do, Sam. Thank you.

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Operator [54]

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Our next question today is coming from [Richard Deutsche] from [National Securities].

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Unidentified Analyst, [55]

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I just wanted to comment that your previous caller has made listening to this call almost unbearable, and I think we need to allow for concise comments and move on. Having said that, the comment that I had, as an intellectual property leader, what is your patent protection? I haven't been able to see any. And have you protected the value of your research and your new product development?

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Martin B. Bloch, Frequency Electronics, Inc. - Executive Chairman & Chief Scientist [56]

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Stan?

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Stanton David Sloane, Frequency Electronics, Inc. - President, CEO, COO & Director [57]

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So we have some patents which are active. We generally deal with trade secrets versus filing the patents. We've just found that to be more effective for us. So you don't see the number of patents in the portfolio, so mostly trade secrets.

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Unidentified Analyst, [58]

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Okay. And...

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Martin B. Bloch, Frequency Electronics, Inc. - Executive Chairman & Chief Scientist [59]

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By the way, you can see that our ability to have won this next-generation development contract, this was a very steep competition. I think there were like 7 or 8 major competitors. And we were picked because of the basic technology that we have at Frequency, and our best success in a short period of time.

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Unidentified Analyst, [60]

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That's very impressive. I was just wondering how you can keep control of what looks like potentially a very valuable asset, and trade secrets are only secret as long as you can control your employees and the knowledge of that. But I understand you're dealing with a large amount of security, and I look forward to following your progress (inaudible) interest in your company, so as I think [we all on this call.]

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Martin B. Bloch, Frequency Electronics, Inc. - Executive Chairman & Chief Scientist [61]

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Thank you very much. We'll do our best not to disappoint you.

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Operator [62]

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Our next question is a follow-up from [Michael Eisner].

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Unidentified Analyst, [63]

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Martin, any time frame on the $37 million contract? How long is this going to take? I know it's like 1.5 years out, 2 years out?

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Martin B. Bloch, Frequency Electronics, Inc. - Executive Chairman & Chief Scientist [64]

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Well, on this -- I can tell you, the Air Force is pushing every day to tighten the schedule. The original schedule I think was flight units available in 3 years, right? And we are doing our best to see what we can do to cut it down significantly. There's a great urgency to get it done as quickly as possible.

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Operator [65]

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Our next question is coming from Brett Reiss with Janney Montgomery Scott.

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Brett Reiss, [66]

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My question is on margins. How are the margins on these new orders with the new satellite type systems versus the margins you enjoyed in past years? And how did the margins on the satellite orders versus the cybersecurity type of business you want to develop compare?

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Martin B. Bloch, Frequency Electronics, Inc. - Executive Chairman & Chief Scientist [67]

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Go ahead, Stan.

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Stanton David Sloane, Frequency Electronics, Inc. - President, CEO, COO & Director [68]

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So generally, margins are improving. If your question is, are we being squeezed on the margin in these competitive bids, the answer is no. Most of the things we do are pretty unique technically and they enjoy reasonably good margins. So I think that's the way I would think about it.

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Operator [69]

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We reached the end of our question-and-answer session. I'd like to turn the floor back over to management for any further or closing comments.

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Martin B. Bloch, Frequency Electronics, Inc. - Executive Chairman & Chief Scientist [70]

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Thank you all for listening. We are signing up to do our best to really grow the company and -- in both revenue and the bottom line. And Stan taking over, doing the hard work in the company, it will give me the opportunity to focus even more on pushing the time spot of Frequency Electronics, and I'm looking forward to doing it. I want to thank you all and stockholders, and we'll do our best not to disappoint you in the future. Thank you, and have a good day.

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Operator [71]

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Thank you. That does conclude today's teleconference. You may disconnect your lines at this time, and have a wonderful day. We thank you for your participation today.