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Frequency Electronics, Inc. (FEIM) and its subsidiaries have release d their condensed consolidated financial statements for the second quarter of 2023, ended July 31st. The report highlights impressive financial performance, with significant increases in both revenue and net income compared to the same period last year.
Revenue Growth
FEI reported revenues of $12.41 million for the three months ending July 31, 2023, marking a substantial increase compared to $8.20 million in the same period in 2022. This remarkable growth represents a 51% year-over-year increase in revenue.
Net Income Turnaround
The company also demonstrated a significant turnaround in its net income. In Q2 2023, FEI reported a net income of $2.04 million, compared to a loss of $3.12 million during the same quarter in 2022. This impressive reversal of fortune reflects the company's commitment to improving its financial performance.
Operational Highlights
FEI's gross margin for the second quarter of 2023 stood at $4.87 million, compared to a loss of $5 thousand in 2022. The company's ability to increase its gross margin substantiates its efforts to enhance operational efficiency.
Expenses during the quarter included $2.30 million in selling and administrative costs, compared to $1.99 million in 2022, and $506 thousand in research and development expenses, down from $1.11 million in the previous year. Operating income for Q2 2023 was $2.06 million, a significant improvement from the operating loss of $3.11 million in Q2 2022.
Strong Balance Sheet
FEI's balance sheet as of July 31, 2023, showcases a strong financial position. The company had $9.06 million in cash and cash equivalents, $6.38 million in accounts receivable, and $11.03 million in contract assets. Inventories, net of $22.60 million, demonstrated effective inventory management.
The company's property, plant, and equipment, net, amounted to $6.78 million, and other assets totaled $11.87 million. Additionally, right-of-use assets from operating leases stood at $7.06 million.
Liabilities and Equity
FEI's liabilities and stockholders' equity remained well-balanced. Current lease liabilities were $1.77 million, while contract liabilities amounted to $18.36 million. Other current liabilities were $6.75 million, and long-term obligations stood at $8.40 million. Non-current operating lease liabilities amounted to $5.52 million.
Stockholders' equity increased to $35.17 million, reflecting the company's improved financial performance.
Frequency Electronics, Inc. and its subsidiaries have reported a remarkable second-quarter performance in 2023, achieving substantial growth in revenue and turning a significant net income loss into a profit. These results indicate that the company is on a positive trajectory and well-positioned for continued success in the future.