Frequency Electronics (FEIM) 10-Q 14 Sep 16 2017 Q1 Quarterly report Financial data

Document And Entity Information

Document And Entity Information - shares	3 Months Ended
	Jul. 31, 2016	Sep. 09, 2016
Document and Entity Information [Abstract]
Entity Registrant Name	FREQUENCY ELECTRONICS INC
Document Type	10-Q
Current Fiscal Year End Date	--04-30
Entity Common Stock, Shares Outstanding		8,729,682
Amendment Flag	false
Entity Central Index Key	39,020
Entity Current Reporting Status	Yes
Entity Voluntary Filers	No
Entity Filer Category	Smaller Reporting Company
Entity Well-known Seasoned Issuer	No
Document Period End Date	Jul. 31, 2016
Document Fiscal Year Focus	2,017
Document Fiscal Period Focus	Q1

Condensed Consolidated Balance

Condensed Consolidated Balance Sheets - USD ($) $ in Thousands	Jul. 31, 2016	Apr. 30, 2016
Current assets:
Cash and cash equivalents	$ 4,016	$ 6,082
Marketable securities	11,581	11,111
Accounts receivable, net of allowance for doubtful accounts of $189 at July 31, 2016 and at April 30, 2016	9,518	9,000
Costs and estimated earnings in excess of billings, net	12,044	12,377
Inventories, net	42,582	41,278
Deferred and prepaid income taxes	3,733	3,213
Prepaid expenses and other	1,202	1,250
Total current assets	84,676	84,311
Property, plant and equipment, at cost, net of accumulated depreciation and amortization	13,430	13,072
Deferred income taxes	7,615	7,702
Goodwill and other intangible assets	617	617
Cash surrender value of life insurance and cash held in trust	12,478	12,819
Other assets	1,695	1,693
Total assets	120,511	120,214
Current liabilities:
Accounts payable - trade	3,985	2,650
Accrued liabilities	5,134	6,108
Total current liabilities	9,119	8,758
Long term debt- noncurrent	6,000	6,000
Deferred compensation	12,005	11,773
Deferred rent and other liabilities	736	331
Total liabilities	27,860	26,862
Commitments and contingencies
Stockholders' equity:
Preferred stock - $1.00 par value authorized 600 shares, no shares issued
Common stock - $1.00 par value; authorized 20,000 shares, 9,164 shares issued and 8,768 outstanding at July 31, 2016; 8,753 outstanding at April 30, 2016	9,164	9,164
Additional paid-in capital	55,815	55,576
Retained earnings	27,827	28,533
	92,806	93,273
Common stock reacquired and held in treasury - at cost (396 shares at July 31, 2016 and 411 shares at April 30, 2016)	(1,816)	(1,885)
Accumulated other comprehensive income	1,661	1,964
Total stockholders' equity	92,651	93,352
Total liabilities and stockholders' equity	$ 120,511	$ 120,214

Condensed Consolidated Balance3

Condensed Consolidated Balance Sheets (Parentheticals) - USD ($) shares in Thousands, $ in Thousands	Jul. 31, 2016	Apr. 30, 2016
Allowance for doubtful accounts (in Dollars)	$ 189	$ 189
Preferred stock, par value (in Dollars per share)	$ 1	$ 1
Preferred stock - shares authorized	600	600
Preferred stock - shares issued	0	0
Common stock, par value (in Dollars per share)	$ 1	$ 1
Common stock shares issued	9,164	9,164
Common stock - authorized shares	20,000	20,000
Common stock - shares outstanding	8,768	8,753
Treasury stock, shares	396	396

Condensed Consolidated Statemen

Condensed Consolidated Statements of Income and Comprehensive (Loss) Income (Unaudited) - USD ($) $ in Thousands	3 Months Ended
	Jul. 31, 2016	Jul. 31, 2015
Revenues	$ 12,708	$ 16,680
Cost of revenues	8,594	10,907
Gross margin	4,114	5,773
Selling and administrative expenses	3,326	3,685
Research and development expense	1,584	1,147
Operating (loss) profit	(796)	941
Other income (expense):
Investment income	92	271
Interest expense	(42)	(24)
Other income (expense), net	0	403
(Loss) income before provision for income taxes	(746)	1,591
Provision for income taxes	(40)	700
Net (loss) income	$ (706)	$ 891
Net (loss) income per common share
Basic (in Dollars per share)	$ (0.08)	$ 0.10
Diluted (in Dollars per share)	$ (0.08)	$ 0.10
Weighted average shares outstanding
Basic (in Shares)	8,762,355	8,706,185
Diluted (in Shares)	8,762,355	8,984,037
Condensed Consolidated Statements of Comprehensive (Loss) Income
Net (loss) income	$ (706)	$ 891
Other comprehensive income (loss):
Foreign currency translation adjustment	(615)	701
Unrealized gain (loss) on marketable securities:
Change in market value of marketable securities before reclassification, net of tax of ($161) and $94	312	(185)
Reclassification adjustment for realized gains included in net income, net of tax of $95 in 2015	0	(90)
Total unrealized gain (loss) on marketable securities, net of tax	312	(275)
Total other comprehensive (loss) income	(303)	426
Comprehensive (loss) income	$ (1,009)	$ 1,317

Condensed Consolidated Stateme5

Condensed Consolidated Statements of Income and Comprehensive (Loss) Income (Unaudited) (Parentheticals) - USD ($) $ in Thousands	3 Months Ended
	Jul. 31, 2016	Jul. 31, 2015
Change in market value of marketable securities before reclassification, tax	$ 161	$ 94
Reclassification adjustment for realized gains included in net income, tax		$ 95

Condensed Consolidated Stateme6

Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands	3 Months Ended
	Jul. 31, 2016	Jul. 31, 2015
Cash flows from operating activities:
Net (loss) income	$ (706)	$ 891
Non-cash charges to earnings	1,617	1,226
Net changes in operating assets and liabilities	(1,482)	(3,942)
Net cash used in operating activities	(571)	(1,825)
Cash flows from investing activities:
Proceeds on redemption of marketable securities	0	(172)
Purchase of marketable securities	0	713
Purchase of fixed assets and other assets	(1,087)	(606)
Net cash used in investing activities	(1,087)	(65)
Cash flows from financing activities:
Proceeds from credit line borrowings	0	0
Payment of credit line borrowings	0	0
Tax benefit from exercise of stock-based compensation	1	8
Net cash provided by financing activities	1	8
Net decrease in cash and cash equivalents before effect of exchange rate changes	(1,657)	(1,882)
Effect of exchange rate changes on cash and cash equivalents	(409)	584
Net decrease in cash and cash equivalents	(2,066)	(1,298)
Cash and cash equivalents at beginning of period	6,082	7,222
Cash and cash equivalents at end of period	4,016	5,924
Cash paid during the period for:
Interest	38	24
Income Taxes	$ 70	$ 230

NOTE A - CONDENSED CONSOLIDATED

NOTE A - CONDENSED CONSOLIDATED FINANCIAL STATEMENTS	3 Months Ended
	Jul. 31, 2016
Disclosure Text Block [Abstract]
Organization, Consolidation and Presentation of Financial Statements Disclosure [Text Block]	NOTE A – CONDENSED CONSOLIDATED FINANCIAL STATEMENTS In the opinion of management of Frequency Electronics, Inc. (“the Company”), the accompanying unaudited condensed consolidated interim financial statements reflect all adjustments (which include only normal recurring adjustments) necessary to present fairly, in all material respects, the consolidated financial position of the Company as of July 31, 2016 and the results of its operations and cash flows for the three months ended July 31, 2016 and 2015. The April 30, 2016 condensed consolidated balance sheet was derived from audited financial statements. Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted. It is suggested that these condensed consolidated financial statements be read in conjunction with the financial statements and notes thereto included in the Company's Annual Report on Form 10-K for the year ended April 30, 2016, filed on July 29, 2016. The results of operations for such interim periods are not necessarily indicative of the operating results for the full fiscal year.

NOTE B - EARNINGS PER SHARE

NOTE B - EARNINGS PER SHARE	3 Months Ended
	Jul. 31, 2016
Earnings Per Share [Abstract]
Earnings Per Share [Text Block]	NOTE B – EARNINGS PER SHARE Reconciliation of the weighted average shares outstanding for basic and diluted Earnings Per Share are as follows: Three months ended July 31, 2016 2015 Weighted average shares outstanding: Basic 8,762,355 8,706,185 Effect of dilutive securities ** 277,852 Diluted 8,762,355 8,984,037 ** For the three-month period ended July 31, 2016, dilutive securities are excluded since the inclusion of such shares would be antidilutive due to the net loss for the period. The exercisable shares excluded are 1,200,625. The computation of diluted earnings per share in the other fiscal periods excludes those options and stock appreciation rights (“SARS”) with an exercise price in excess of the average market price of the Company’s common shares during the periods presented. The inclusion of such options and SARS in the computation of earnings per share would have been antidilutive. The number of excluded options and SARS were: Three months ended July 31, 2016 2015 Outstanding options and SARS excluded ** 330,500

NOTE C - COSTS AND ESTIMATED EA

NOTE C - COSTS AND ESTIMATED EARNINGS IN EXCESS OF BILLINGS, NET	3 Months Ended
	Jul. 31, 2016
Contractors [Abstract]
Long-term Contracts or Programs Disclosure [Text Block]	NOTE C – COSTS AND ESTIMATED EARNINGS IN EXCESS OF BILLINGS, NET At July 31, 2016 and April 30, 2016, costs and estimated earnings in excess of billings, net, consist of the following: July 31, 2016 April 30, 2016 (In thousands) Costs and estimated earnings in excess of billings $ 12,451 $ 12,460 Billings in excess of costs and estimated earnings (407 ) (83 ) Net asset $ 12,044 $ 12,377 Such amounts represent revenue recognized on long-term contracts that had not been billed at the balance sheet dates or represent a liability for amounts billed in excess of the revenue recognized. Amounts are billed to customers pursuant to contract terms, whereas the related revenue is recognized on the percentage of completion basis at the measurement date. In general, the recorded amounts will be billed and collected or revenue recognized within twelve months of the balance sheet date. Revenue on these long-term contracts is accounted for on the percentage of completion basis. During the three months ended July 31, 2016 and 2015, revenue recognized under percentage of completion contracts was approximately $7.3 million and $9.3 million, respectively.

NOTE D - TREASURY STOCK TRANSAC

NOTE D - TREASURY STOCK TRANSACTIONS	3 Months Ended
	Jul. 31, 2016
Disclosure Text Block Supplement [Abstract]
Treasury Stock [Text Block]	NOTE D – TREASURY STOCK TRANSACTIONS During the three month period ended July 31, 2016, the Company made contributions of 14,365 shares of its common stock held in treasury to the Company’s profit sharing plan and trust under section 401(k) of the Internal Revenue Code. Such contributions are in accordance with the Company’s discretionary match of employee voluntary contributions to this plan. During the same periods, the Company issued 667 shares from treasury upon the exercise of SARs by certain officers and employees of the Company.

NOTE E - INVENTORIES

NOTE E - INVENTORIES	3 Months Ended
	Jul. 31, 2016
Inventory Disclosure [Abstract]
Inventory Disclosure [Text Block]	NOTE E – INVENTORIES Inventories, which are reported at the lower of cost or market, consist of the following: July 31, 2016 April 30, 2016 (In thousands) Raw Materials and Component Parts $ 26,014 $ 25,110 Work in Progress 12,226 12,042 Finished Goods 4,342 4,126 $ 42,582 $ 41,278 As of July 31, 2016 and April 30, 2016, approximately $36.6 million and $35.3 million, respectively, of total inventory is located in the United States, approximately $5.0 million and $5.0 million, respectively, is located in Belgium and $1.0 million and $1.0 million, respectively, is located in China.

NOTE F - SEGMENT INFORMATION

NOTE F - SEGMENT INFORMATION	3 Months Ended
	Jul. 31, 2016
Segment Reporting [Abstract]
Segment Reporting Disclosure [Text Block]	NOTE F – SEGMENT INFORMATION The Company operates under three reportable segments based on the geographic locations of its subsidiaries: (1) FEI-NY – operates out of New York and its operations consist principally of precision time and frequency control products used in three principal markets- communication satellites (both commercial and U.S. Government-funded); terrestrial cellular telephone or other ground-based telecommunication stations and other components and systems for the U.S. military. (2) Gillam-FEI - operates out of Belgium and France and primarily sells wireline synchronization and network management systems in non-U.S. markets. All sales from Gillam-FEI to the United States are to other segments of the Company. (3) FEI-Zyfer – operates out of California and its products incorporate Global Positioning System (GPS) technologies into systems and subsystems for secure communications, both government and commercial, and other locator applications. This segment also provides sales and support for the Company’s wireline telecommunications family of products, including US5G, which are sold in the United States market. The FEI-NY segment also includes the operations of the Company’s wholly-owned subsidiaries, FEI-Elcom Tech (“FEI-Elcom”) and FEI-Asia. FEI-Asia functions primarily as a manufacturing facility for the Company’s commercial product subsidiaries with historically minimal sales to outside customers. Beginning in late fiscal year 2014, FEI-Asia began shipping higher volumes of product to third parties as a contract manufacturer. FEI-Elcom, in addition to its own product line, provides design and technical support for the FEI-NY segment’s satellite business. The Company’s chief executive officer measures segment performance based on total revenues and profits generated by each geographic location rather than on the specific types of customers or end-users. Consequently, the Company determined that the segments indicated above most appropriately reflect the way the Company’s management views the business. The tables below present information about reported segments with reconciliation of segment amounts to consolidated amounts as reported in the statement of income or the balance sheet for each of the periods (in thousands): Three months ended July 31, 2016 2015 Revenues: FEI-NY $ 9,982 $ 13,494 Gillam-FEI 1,168 1,407 FEI-Zyfer 2,346 2,100 less intercompany revenues (788 ) (321 ) Consolidated revenues $ 12,708 $ 16,680 Operating (loss) profit : FEI-NY $ (67 ) $ 1,087 Gillam-FEI (494 ) (217 ) FEI-Zyfer (185 ) 123 Corporate (50 ) (52 ) Consolidated operating (loss) profit $ (796 ) $ 941 July 31, 2016 April 30, 2016 Identifiable assets: FEI-NY (approximately $2.3 and $2.5 million in China) $ 65,720 $ 62,992 Gillam-FEI (all in Belgium or France) 9,566 9,610 FEI-Zyfer 12,638 13,275 less intersegment balances (8,345 ) (7,651 ) Corporate 40,932 41,988 Consolidated identifiable assets $ 120,511 $ 120,214

NOTE G - INVESTMENT IN MORION,

NOTE G - INVESTMENT IN MORION, INC.	3 Months Ended
	Jul. 31, 2016
Investment Holdings [Abstract]
Investment Holdings [Text Block]	NOTE G – INVESTMENT IN MORION, INC. The Company has an investment in Morion, Inc., (“Morion”) a privately-held Russian company, which manufactures high precision quartz resonators and crystal oscillators. The Company’s investment consists of 4.6% of Morion’s outstanding shares, accordingly, the Company accounts for its investment in Morion on the cost basis. This investment is included in other assets in the accompanying balance sheets. During the three months ended July 31, 2016 and 2015, the Company acquired product from Morion in the aggregate amount of approximately $81,000 and $32,000, respectively, and the Company sold product and training services to Morion in the aggregate amount of approximately $10,000 and $423,000, respectively. (See discussion of revenues recognized under the license agreement in the paragraph below.) At July 31, 2016, approximately $29,000 was payable to Morion and accounts receivable from Morion was approximately $33,000. On October 22, 2012, the Company entered into an agreement to license its rubidium oscillator production technology to Morion. The agreement required the Company to sell certain fully-depreciated production equipment previously owned by the Company and to provide training to Morion employees to enable Morion to produce a minimum of 5,000 rubidium oscillators per year. Morion will pay the Company approximately $2.7 million for the license and the equipment plus 5% royalties on third party sales for a 5-year period following an initial production run. During the same 5-year period, the Company commits to purchase from Morion a minimum of approximately $400,000 worth of rubidium oscillators per year although Morion is not obligated to sell that amount to the Company.

NOTE H - FAIR VALUE OF FINANCIA

NOTE H - FAIR VALUE OF FINANCIAL INSTRUMENTS	3 Months Ended
	Jul. 31, 2016
Investments, Debt and Equity Securities [Abstract]
Investments in Debt and Marketable Equity Securities (and Certain Trading Assets) Disclosure [Text Block]	NOTE H – FAIR VALUE OF FINANCIAL INSTRUMENTS The cost, gross unrealized gains, gross unrealized losses and fair market value of available-for-sale securities at July 31, 2016 and April 30, 2016 are as follows (in thousands): July 31, 2016 Cost Gross Unrealized Gains Gross Unrealized Losses Fair Market Value Fixed income securities $ 3,404 $ 167 $ - $ 3,571 Equity securities 7,197 1,322 (509 ) 8,010 $ 10,601 $ 1,489 $ (509 ) $ 11,581 April 30, 2016 Cost Gross Unrealized Gains Gross Unrealized Losses Fair Market Value Fixed income securities $ 3,407 $ 121 $ (6 ) $ 3,522 Equity securities 7,197 974 (582 ) 7,589 $ 10,604 $ 1,095 $ (588 ) $ 11,111 The following table presents the fair value and unrealized losses, aggregated by investment type and length of time that individual securities have been in a continuous unrealized loss position (in thousands): Less than 12 months 12 Months or more Total Fair Value Unrealized Losses Fair Value Unrealized Losses Fair Value Unrealized Losses July 31, 2016 Fixed Income Securities $ - $ - $ - $ - $ - $ - Equity Securities 290 (7 ) 2,161 (502 ) 2,451 (509 ) $ 290 $ (7 ) $ 2,161 $ (502 ) $ 2,451 $ (509 ) April 30, 2016 Fixed Income Securities $ - $ - $ 467 $ (6 ) $ 467 $ (6 ) Equity Securities 574 (18 ) 2,232 (564 ) 2,806 (582 ) $ 574 $ (18 ) $ 2,699 $ (570 ) $ 3,273 $ (588 ) The Company regularly reviews its investment portfolio to identify and evaluate investments that have indications of possible impairment. The Company does not believe that its investments in marketable securities with unrealized losses at July 31, 2016 are other-than-temporary due to market volatility of the security’s fair value, analysts’ expectations and the Company’s ability to hold the securities for a period of time sufficient to allow for any anticipated recoveries in market value. During the three months ended July 31, 2016 the Company neither sold nor redeemed available-for-sale securities. During the three months ended July 31, 2015, the Company sold or redeemed available-for-sale securities in the amounts of $713,000, realizing gains of approximately $137,000. Maturities of fixed income securities classified as available-for-sale at July 31, 2016 are as follows, at cost (in thousands): Current $ 1,100 Due after one year through five years 515 Due after five years through ten years 1,789 $ 3,404 The fair value accounting framework provides a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (level 1 measurements) and the lowest priority to unobservable inputs (level 3 measurements). The three levels of the fair value hierarchy are described below: Level 1 Inputs to the valuation methodology are unadjusted quoted prices for identical assets or liabilities in active markets that the Company has the ability to access. Level 2 Inputs to the valuation methodology include: - Quoted prices for similar assets or liabilities in active markets; - Quoted prices for identical or similar assets or liabilities in inactive markets - Inputs other than quoted prices that are observable for the asset or liability; - Inputs that are derived principally from or corroborated by observable market data by correlation or other means. Level 3 Inputs to the valuation methodology are unobservable and significant to the fair value measurement. The asset’s or liability’s fair value measurement level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement. Valuation techniques used need to maximize the use of observable inputs and minimize the use of unobservable inputs. All of the Company’s investments in marketable securities are valued on a Level 1 basis.

NOTE I - RECENTLY ISSUED ACCOUN

NOTE I - RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS	3 Months Ended
	Jul. 31, 2016
New Accounting Pronouncements and Changes in Accounting Principles [Abstract]
New Accounting Pronouncements and Changes in Accounting Principles [Text Block]	NOTE I – RECENT ACCOUNTING PRONOUNCEMENTS In March 2016, the Financial Accounting Standards Board (“FASB”) amended the existing accounting standards for stock-based compensation, Accounting Standards Update (“ASU”) 2016-09, Compensation-Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting In February 2016, the FASB issued ASU No. 2016-02 Leases (Topic 842). The objective of the update is to increase transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheet and disclosing key information about leasing arrangements. The amendments of the ASU 2016-02 are effective for fiscal years beginning after December 31, 2018 and early adoption is permitted. The Company is currently evaluating the impact of this standard on our consolidated financial statements. In November 2015, the FASB issued ASU No. 2015-17 (“ASU 2015-17”), Income Taxes (Topic 740): Balance Sheet Classification of Deferred Taxes In July 2015, the FASB issued ASU 2015-11, Inventory (Topic 330): Simplifying the Measurement of Inventory In August 2014, the FASB issued ASU No. 2014-15 , Presentation of Financial Statements – Going Concern (Subtopic 205-40): Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern (“ASU 2014-15”), In May 2014, the FASB issued ASU No. 2014-09 , Revenue from Contracts with Customers (Topic 606)

NOTE J - CREDIT FACILITY

NOTE J - CREDIT FACILITY	3 Months Ended
	Jul. 31, 2016
Debt Disclosure [Abstract]
Debt Disclosure [Text Block]	NOTE J – CREDIT FACILITY On June 6, 2013, the Company obtained a credit facility (the “Facility”) from JPMorgan Chase Bank, N.A. (“JPMorgan”) pursuant to a credit agreement (the “Credit Agreement”) between the Company and JPMorgan. The maximum aggregate amount of the Facility is $25.0 million. Proceeds from the Facility will be used for working capital and to finance acquisitions. During the year ended April 30, 2015, the Company borrowed an additional $2.3 million under the Facility primarily to finance the acquisition of additional manufacturing equipment and repaid an aggregate of $6.4 million from its operating cash flow and as a result of redemptions of certain fixed income marketable securities. The Company may make borrowings under the Facility, from either Tranche A or Tranche B or a combination of both, not to exceed $25.0 million. Pursuant to the Credit Agreement, the amount of Tranche A borrowings may not exceed the value of the Pledged Investments (as defined in the Credit Agreement). The amount of Tranche B borrowings may not exceed the lesser of (i) $15.0 million and (ii) the Borrowing Base (as defined in the Credit Agreement). Current outstanding borrowings of $6.0 million Borrowings under the Facility are evidenced by a line of credit note (the “Note”) and bear interest, payable monthly, at a rate equal to the LIBOR Rate, as determined from time to time by JPMorgan pursuant to the terms of the Note, plus a margin of 0.75% for Tranche A borrowings and 1.75% for Tranche B borrowings. The principal balance on the Note, along with any accrued and unpaid interest, is due and payable no later than June 5, 2018, which is the maturity date of the Facility. In addition, the Company is required to pay JPMorgan fees equal to 0.1% per annum on any unused portion of the Facility. The Credit Agreement contains a number of affirmative and negative covenants, including limitations on the incurrence of additional debt, liens on property, acquisitions, loans and guarantees, mergers, consolidations, liquidations and dissolutions, asset sales, and distributions and other payments in respect of the Company’s capital stock. The Credit Agreement also contains certain events of default customary for credit facilities of this type, including nonpayment of principal or interest when due, material incorrectness of representations and warranties when made, breach of covenants, bankruptcy and insolvency, unstayed material judgment beyond specified periods, and acceleration or payment default of other material indebtedness. The Credit Agreement requires the Company to maintain, as of the end of each fiscal quarter, a funded debt to EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) ratio and an interest charge coverage ratio. The calculation of both ratios is defined in the Credit Agreement. For the period ended July 31, 2016, the Company met the required covenants for its borrowings under Tranche A.

NOTE K - VALUATION ALLOWANCE ON

NOTE K - VALUATION ALLOWANCE ON DEFERRED TAX ASSETS	3 Months Ended
	Jul. 31, 2016
Income Tax Disclosure [Abstract]
Income Tax Disclosure [Text Block]	NOTE K – VALUATION ALLOWANCE ON DEFERRED TAX ASSETS In prior fiscal years, the Company reduced the valuation allowance on the deferred tax assets of its U.S. subsidiaries. Consequently, for the three months ended July 31, 2016 and 2015, the Company recorded provisions for income taxes based on both current taxes due in the United States as well as the tax provision or benefit to be realized from temporary tax differences. As of April 30, 2016, the deferred tax asset valuation allowance was approximately $3.3 million . The valuation allowance is primarily related to deferred tax assets of the Company’s non-U.S.-based subsidiaries and U.S. state investment tax credit carryovers.

NOTE B - EARNINGS PER SHARE (Ta

NOTE B - EARNINGS PER SHARE (Tables)	3 Months Ended
	Jul. 31, 2016
Earnings Per Share [Abstract]
Schedule of Earnings Per Share, Basic and Diluted [Table Text Block]	Reconciliation of the weighted average shares outstanding for basic and diluted Earnings Per Share are as follows: Three months ended July 31, 2016 2015 Weighted average shares outstanding: Basic 8,762,355 8,706,185 Effect of dilutive securities ** 277,852 Diluted 8,762,355 8,984,037 ** For the three-month period ended July 31, 2016, dilutive securities are excluded since the inclusion of such shares would be antidilutive due to the net loss for the period. The exercisable shares excluded are 1,200,625.
Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share [Table Text Block]	The computation of diluted earnings per share in the other fiscal periods excludes those options and stock appreciation rights (“SARS”) with an exercise price in excess of the average market price of the Company’s common shares during the periods presented. The inclusion of such options and SARS in the computation of earnings per share would have been antidilutive. The number of excluded options and SARS were: Three months ended July 31, 2016 2015 Outstanding options and SARS excluded ** 330,500

NOTE C - COSTS AND ESTIMATED 19

NOTE C - COSTS AND ESTIMATED EARNINGS IN EXCESS OF BILLINGS, NET (Tables)	3 Months Ended
	Jul. 31, 2016
Contractors [Abstract]
Costs and Estimated Earnings in Excess of Billings, Net [Table Text Block]	At July 31, 2016 and April 30, 2016, costs and estimated earnings in excess of billings, net, consist of the following: July 31, 2016 April 30, 2016 (In thousands) Costs and estimated earnings in excess of billings $ 12,451 $ 12,460 Billings in excess of costs and estimated earnings (407 ) (83 ) Net asset $ 12,044 $ 12,377

NOTE E - INVENTORIES (Tables)

NOTE E - INVENTORIES (Tables)	3 Months Ended
	Jul. 31, 2016
Inventory Disclosure [Abstract]
Schedule of Inventory, Current [Table Text Block]	Inventories, which are reported at the lower of cost or market, consist of the following: July 31, 2016 April 30, 2016 (In thousands) Raw Materials and Component Parts $ 26,014 $ 25,110 Work in Progress 12,226 12,042 Finished Goods 4,342 4,126 $ 42,582 $ 41,278

NOTE F - SEGMENT INFORMATION (T

NOTE F - SEGMENT INFORMATION (Tables)	3 Months Ended
	Jul. 31, 2016
Segment Reporting [Abstract]
Reconciliation of Revenue from Segments to Consolidated [Table Text Block]	The tables below present information about reported segments with reconciliation of segment amounts to consolidated amounts as reported in the statement of income or the balance sheet for each of the periods (in thousands): Three months ended July 31, 2016 2015 Revenues: FEI-NY $ 9,982 $ 13,494 Gillam-FEI 1,168 1,407 FEI-Zyfer 2,346 2,100 less intercompany revenues (788 ) (321 ) Consolidated revenues $ 12,708 $ 16,680
Reconciliation of Operating Profit (Loss) from Segments to Consolidated [Table Text Block]	Operating (loss) profit : FEI-NY $ (67 ) $ 1,087 Gillam-FEI (494 ) (217 ) FEI-Zyfer (185 ) 123 Corporate (50 ) (52 ) Consolidated operating (loss) profit $ (796 ) $ 941
Reconciliation of Assets from Segment to Consolidated [Table Text Block]	July 31, 2016 April 30, 2016 Identifiable assets: FEI-NY (approximately $2.3 and $2.5 million in China) $ 65,720 $ 62,992 Gillam-FEI (all in Belgium or France) 9,566 9,610 FEI-Zyfer 12,638 13,275 less intersegment balances (8,345 ) (7,651 ) Corporate 40,932 41,988 Consolidated identifiable assets $ 120,511 $ 120,214

NOTE H - FAIR VALUE OF FINANC22

NOTE H - FAIR VALUE OF FINANCIAL INSTRUMENTS (Tables)	3 Months Ended
	Jul. 31, 2016
Investments, Debt and Equity Securities [Abstract]
Schedule of Available-for-sale Securities Reconciliation [Table Text Block]	The cost, gross unrealized gains, gross unrealized losses and fair market value of available-for-sale securities at July 31, 2016 and April 30, 2016 are as follows (in thousands): July 31, 2016 Cost Gross Unrealized Gains Gross Unrealized Losses Fair Market Value Fixed income securities $ 3,404 $ 167 $ - $ 3,571 Equity securities 7,197 1,322 (509 ) 8,010 $ 10,601 $ 1,489 $ (509 ) $ 11,581 April 30, 2016 Cost Gross Unrealized Gains Gross Unrealized Losses Fair Market Value Fixed income securities $ 3,407 $ 121 $ (6 ) $ 3,522 Equity securities 7,197 974 (582 ) 7,589 $ 10,604 $ 1,095 $ (588 ) $ 11,111
Available-for-sale Securities, Continuous Unrealized Loss Position, Fair Value [Table Text Block]	The following table presents the fair value and unrealized losses, aggregated by investment type and length of time that individual securities have been in a continuous unrealized loss position (in thousands): Less than 12 months 12 Months or more Total Fair Value Unrealized Losses Fair Value Unrealized Losses Fair Value Unrealized Losses July 31, 2016 Fixed Income Securities $ - $ - $ - $ - $ - $ - Equity Securities 290 (7 ) 2,161 (502 ) 2,451 (509 ) $ 290 $ (7 ) $ 2,161 $ (502 ) $ 2,451 $ (509 ) April 30, 2016 Fixed Income Securities $ - $ - $ 467 $ (6 ) $ 467 $ (6 ) Equity Securities 574 (18 ) 2,232 (564 ) 2,806 (582 ) $ 574 $ (18 ) $ 2,699 $ (570 ) $ 3,273 $ (588 )
Investments Classified by Contractual Maturity Date [Table Text Block]	Maturities of fixed income securities classified as available-for-sale at July 31, 2016 are as follows, at cost (in thousands): Current $ 1,100 Due after one year through five years 515 Due after five years through ten years 1,789 $ 3,404

NOTE B - EARNINGS PER SHARE (De

NOTE B - EARNINGS PER SHARE (Details) - shares	3 Months Ended
	Jul. 31, 2016	Jul. 31, 2015
NOTE B - EARNINGS PER SHARE (Details) [Line Items]
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount		330,500
Employee Stock Option [Member]
NOTE B - EARNINGS PER SHARE (Details) [Line Items]
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount	1,200,625

NOTE B - EARNINGS PER SHARE (D

NOTE B - EARNINGS PER SHARE (Details) - Schedule of Earnings Per Share, Basic and Diluted - shares	3 Months Ended
	Jul. 31, 2016		Jul. 31, 2015
Weighted average shares outstanding:
Basic	8,762,355		8,706,185
Effect of dilutive securities		[1]	277,852
Diluted	8,762,355		8,984,037
[1]	For the three-month period ended July 31, 2016, dilutive securities are excluded since the inclusion of such shares would be antidilutive due to the net loss for the period. The exercisable shares excluded are 1,200,625.

NOTE B - EARNINGS PER SHARE 25

NOTE B - EARNINGS PER SHARE (Details) - Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share	3 Months Ended
	Jul. 31, 2015shares
Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share [Abstract]
Outstanding options and SARS excluded	330,500

NOTE C - COSTS AND ESTIMATED 26

NOTE C - COSTS AND ESTIMATED EARNINGS IN EXCESS OF BILLINGS, NET (Details) - USD ($) $ in Thousands	3 Months Ended
	Jul. 31, 2016	Jul. 31, 2015
NOTE C - COSTS AND ESTIMATED EARNINGS IN EXCESS OF BILLINGS, NET (Details) [Line Items]
Revenues	$ 12,708	$ 16,680
Contracts Accounted for under Percentage of Completion [Member]
NOTE C - COSTS AND ESTIMATED EARNINGS IN EXCESS OF BILLINGS, NET (Details) [Line Items]
Revenues	$ 7,300	$ 9,300

NOTE C - COSTS AND ESTIMATED 27

NOTE C - COSTS AND ESTIMATED EARNINGS IN EXCESS OF BILLINGS, NET (Details) - Costs and Estimated Earnings in Excess of Billings, Net - USD ($) $ in Thousands	Jul. 31, 2016	Apr. 30, 2016
Costs and Estimated Earnings in Excess of Billings, Net [Abstract]
Costs and estimated earnings in excess of billings	$ 12,451	$ 12,460
Billings in excess of costs and estimated earnings	(407)	(83)
Net asset	$ 12,044	$ 12,377

NOTE D - TREASURY STOCK TRANS28

NOTE D - TREASURY STOCK TRANSACTIONS (Details)	3 Months Ended
	Jul. 31, 2016shares
Disclosure Text Block Supplement [Abstract]
Defined Contribution Plan, Employer Discretionary Contribution, Shares	14,365
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercises in Period	667

NOTE E - INVENTORIES (Details)

NOTE E - INVENTORIES (Details) - USD ($) $ in Thousands	Jul. 31, 2016	Apr. 30, 2016
NOTE E - INVENTORIES (Details) [Line Items]
Inventory, Net	$ 42,582	$ 41,278
UNITED STATES
NOTE E - INVENTORIES (Details) [Line Items]
Inventory, Net	36,600	35,300
BELGIUM
NOTE E - INVENTORIES (Details) [Line Items]
Inventory, Net	5,000	5,000
CHINA
NOTE E - INVENTORIES (Details) [Line Items]
Inventory, Net	$ 1,000	$ 1,000

NOTE E - INVENTORIES (Details)

NOTE E - INVENTORIES (Details) - Schedule of Inventory, Current - USD ($) $ in Thousands	Jul. 31, 2016	Apr. 30, 2016
Schedule of Inventory, Current [Abstract]
Raw Materials and Component Parts	$ 26,014	$ 25,110
Work in Progress	12,226	12,042
Finished Goods	4,342	4,126
	$ 42,582	$ 41,278

NOTE F - SEGMENT INFORMATION (D

NOTE F - SEGMENT INFORMATION (Details)	3 Months Ended
	Jul. 31, 2015
NOTE F - SEGMENT INFORMATION (Details) [Line Items]
Number of Reportable Segments	3
Frequency Electronics Inc New York [Member]
NOTE F - SEGMENT INFORMATION (Details) [Line Items]
Number Of Principal Markets	3

NOTE F - SEGMENT INFORMATION (

NOTE F - SEGMENT INFORMATION (Details) - Reconciliation of Revenue from Segments to Consolidated - USD ($) $ in Thousands	3 Months Ended
	Jul. 31, 2016	Jul. 31, 2015
Revenues:
Revenues	$ 12,708	$ 16,680
Frequency Electronics Inc New York [Member]
Revenues:
Revenues	9,982	13,494
Gillam Frequency Electronics Inc [Member]
Revenues:
Revenues	1,168	1,407
Frequency Electronics Inc Zyfer [Member]
Revenues:
Revenues	2,346	2,100
Inter Segment [Member]
Revenues:
Revenues	$ (788)	$ (321)

NOTE F - SEGMENT INFORMATION 33

NOTE F - SEGMENT INFORMATION (Details) - Reconciliation of Operating Profit (Loss) from Segments to Consolidated - USD ($) $ in Thousands	3 Months Ended
	Jul. 31, 2016	Jul. 31, 2015
Operating (loss) profit :
Operating profit (loss)	$ (796)	$ 941
Frequency Electronics Inc New York [Member]
Operating (loss) profit :
Operating profit (loss)	(67)	1,087
Gillam Frequency Electronics Inc [Member]
Operating (loss) profit :
Operating profit (loss)	(494)	(217)
Frequency Electronics Inc Zyfer [Member]
Operating (loss) profit :
Operating profit (loss)	(185)	123
Corporate Segment [Member]
Operating (loss) profit :
Operating profit (loss)	$ (50)	$ (52)

NOTE F - SEGMENT INFORMATION 34

NOTE F - SEGMENT INFORMATION (Details) - Schedule of Reconciliation of Assets from Segment to Consolidated - USD ($) $ in Thousands	Jul. 31, 2016	Apr. 30, 2016
Identifiable assets:
Identifiable Assets	$ 120,511	$ 120,214
Frequency Electronics Inc New York [Member]
Identifiable assets:
Identifiable Assets	65,720	62,992
Gillam Frequency Electronics Inc [Member]
Identifiable assets:
Identifiable Assets	9,566	9,610
Frequency Electronics Inc Zyfer [Member]
Identifiable assets:
Identifiable Assets	12,638	13,275
Inter Segment [Member]
Identifiable assets:
Identifiable Assets	(8,345)	(7,651)
Corporate Segment [Member]
Identifiable assets:
Identifiable Assets	$ 40,932	$ 41,988

NOTE F - SEGMENT INFORMATION 35

NOTE F - SEGMENT INFORMATION (Details) - Schedule of Reconciliation of Assets from Segment to Consolidated (Parentheticals) - USD ($) $ in Millions	Jul. 31, 2016	Apr. 30, 2016
CHINA | Frequency Electronics Inc New York [Member]
Segment Reporting, Asset Reconciling Item [Line Items]
Identifiable assets	$ 2.3	$ 2.5

NOTE G - INVESTMENT IN MORION36

NOTE G - INVESTMENT IN MORION, INC. (Details) - Morion Inc [Member] - USD ($)	Oct. 22, 2012	Jul. 31, 2016	Jul. 31, 2015	Mar. 29, 2016
NOTE G - INVESTMENT IN MORION, INC. (Details) [Line Items]
Cost Method Investment Ownership Percentage		4.60%
Related Party Transaction, Purchases from Related Party		$ 81,000	$ 32,000
Revenue from Related Parties		10,000	$ 423,000
Accounts Payable, Related Parties, Current		29,000
Accounts Receivable, Related Parties, Current		33,000
Licensing Agreement [Member]
NOTE G - INVESTMENT IN MORION, INC. (Details) [Line Items]
Long-term Purchase Commitment, Description	The agreement required the Company to sell certain fully-depreciated production equipment previously owned by the Company and to provide training to Morion employees to enable Morion to produce a minimum of 5,000 rubidium oscillators per year.
License And Equipment Fee Receivable	$ 2,700,000
Percentage Of Royalties Payable On Third Party Sales	5.00%
Long-term Purchase Commitment, Period	5 years
Purchase Commitment, Remaining Minimum Amount Committed	$ 400,000
Balance for Transfer of License Due Once State Department Approves Removal of Certain Provisions [Member]
NOTE G - INVESTMENT IN MORION, INC. (Details) [Line Items]
Revenue from Related Parties		$ 10,000
License And Equipment Fee Receivable				$ 602,000

NOTE H - FAIR VALUE OF FINANC37

NOTE H - FAIR VALUE OF FINANCIAL INSTRUMENTS (Details) $ in Millions	3 Months Ended
	Jul. 31, 2016USD ($)
Investments, Debt and Equity Securities [Abstract]
Available-for-sale Securities, Gross Realized Gains (Losses), Sale Proceeds	$ 713,000
Available-for-sale Securities, Gross Realized Gains	$ 137,000

NOTE H - FAIR VALUE OF FINANC38

NOTE H - FAIR VALUE OF FINANCIAL INSTRUMENTS (Details) - Schedule of Available-for-sale Securities Reconciliation - USD ($) $ in Thousands	3 Months Ended	12 Months Ended
	Jul. 31, 2016	Apr. 30, 2016
NOTE H - FAIR VALUE OF FINANCIAL INSTRUMENTS (Details) - Schedule of Available-for-sale Securities Reconciliation [Line Items]
Cost	$ 10,601	$ 10,604
Gross Unrealized Gains	1,489	1,095
Gross Unrealized Losses	(509)	(588)
Fair Market Value	11,581	11,111
Fixed Income Securities [Member]
NOTE H - FAIR VALUE OF FINANCIAL INSTRUMENTS (Details) - Schedule of Available-for-sale Securities Reconciliation [Line Items]
Cost	3,404	3,407
Gross Unrealized Gains	167	121
Gross Unrealized Losses	0	(6)
Fair Market Value	3,571	3,522
Equity Securities [Member]
NOTE H - FAIR VALUE OF FINANCIAL INSTRUMENTS (Details) - Schedule of Available-for-sale Securities Reconciliation [Line Items]
Cost	7,197	7,197
Gross Unrealized Gains	1,322	974
Gross Unrealized Losses	(509)	(582)
Fair Market Value	$ 8,010	$ 7,589

NOTE H - FAIR VALUE OF FINANC39

NOTE H - FAIR VALUE OF FINANCIAL INSTRUMENTS (Details) - Available-for-sale Securities, Continuous Unrealized Loss Position, Fair Value - USD ($) $ in Thousands	3 Months Ended	12 Months Ended
	Jul. 31, 2016	Apr. 30, 2016
NOTE H - FAIR VALUE OF FINANCIAL INSTRUMENTS (Details) - Available-for-sale Securities, Continuous Unrealized Loss Position, Fair Value [Line Items]
Fair Value, Less than 12 months	$ 290	$ 574
Unrealized Losses, Less than 12 months	(7)	(18)
Fair Value, 12 Months or more	2,161	2,699
Unrealized Losses, 12 Months or more	(502)	(570)
Fair Value	2,451	3,273
Unrealized Losses	(509)	(588)
Fixed Income Securities [Member]
NOTE H - FAIR VALUE OF FINANCIAL INSTRUMENTS (Details) - Available-for-sale Securities, Continuous Unrealized Loss Position, Fair Value [Line Items]
Fair Value, Less than 12 months	0	0
Unrealized Losses, Less than 12 months	0	0
Fair Value, 12 Months or more	0	467
Unrealized Losses, 12 Months or more	0	(6)
Fair Value	0	467
Unrealized Losses	0	(6)
Equity Securities [Member]
NOTE H - FAIR VALUE OF FINANCIAL INSTRUMENTS (Details) - Available-for-sale Securities, Continuous Unrealized Loss Position, Fair Value [Line Items]
Fair Value, Less than 12 months	290	574
Unrealized Losses, Less than 12 months	(7)	(18)
Fair Value, 12 Months or more	2,161	2,232
Unrealized Losses, 12 Months or more	(502)	(564)
Fair Value	2,451	2,806
Unrealized Losses	$ (509)	$ (582)

NOTE H - FAIR VALUE OF FINANC40

NOTE H - FAIR VALUE OF FINANCIAL INSTRUMENTS (Details) - Investments Classified by Contractual Maturity Date - Fixed Income Securities [Member] $ in Thousands	Jul. 31, 2016USD ($)
NOTE H - FAIR VALUE OF FINANCIAL INSTRUMENTS (Details) - Investments Classified by Contractual Maturity Date [Line Items]
Current	$ 1,100
Due after one year through five years	515
Due after five years through ten years	1,789
	$ 3,404

NOTE J - CREDIT FACILITY (Detai

NOTE J - CREDIT FACILITY (Details) - USD ($) $ in Thousands	3 Months Ended		12 Months Ended
	Jul. 31, 2016	Jul. 31, 2015	Apr. 30, 2015
NOTE J - CREDIT FACILITY (Details) [Line Items]
Proceeds from Lines of Credit	$ 0	$ 0	$ 2,300
Repayments of Lines of Credit	0	$ 0	$ 6,400
JP Morgan Chase Bank, N.A. [Member] | Line of Credit [Member]
NOTE J - CREDIT FACILITY (Details) [Line Items]
Line of Credit Facility, Maximum Borrowing Capacity	$ 25,000
Line of Credit Facility, Borrowing Capacity, Description	Pursuant to the Credit Agreement, the amount of Tranche A borrowings may not exceed the value of the Pledged Investments (as defined in the Credit Agreement). The amount of Tranche B borrowings may not exceed the lesser of (i) $15.0 million and (ii) the Borrowing Base (as defined in the Credit Agreement).
Line of Credit Facility, Collateral	The Facility is fully guaranteed by certain of the Company’s subsidiaries and is secured by, among other things, a pledge of substantially all personal property of the Company and certain of the Company’s subsidiaries.
Line of Credit Facility, Expiration Date	Jun. 5, 2018
Line of Credit Facility, Commitment Fee Percentage	0.10%
JP Morgan Chase Bank, N.A. [Member] | Line of Credit [Member] | Debt Instrument, Tranche B [Member]
NOTE J - CREDIT FACILITY (Details) [Line Items]
Line of Credit Facility, Maximum Borrowing Capacity	$ 15,000
JP Morgan Chase Bank, N.A. [Member] | Line of Credit [Member] | Debt Instrument, Tranche B [Member] | London Interbank Offered Rate (LIBOR) [Member]
NOTE J - CREDIT FACILITY (Details) [Line Items]
Debt Instrument, Basis Spread on Variable Rate	1.75%
JP Morgan Chase Bank, N.A. [Member] | Line of Credit [Member] | Debt Instrument, Tranche A [Member]
NOTE J - CREDIT FACILITY (Details) [Line Items]
Long-term Line of Credit	$ 6,000
JP Morgan Chase Bank, N.A. [Member] | Line of Credit [Member] | Debt Instrument, Tranche A [Member] | London Interbank Offered Rate (LIBOR) [Member]
NOTE J - CREDIT FACILITY (Details) [Line Items]
Debt Instrument, Basis Spread on Variable Rate	0.75%

NOTE K - VALUATION ALLOWANCE 42

NOTE K - VALUATION ALLOWANCE ON DEFERRED TAX ASSETS (Details) $ in Millions	Apr. 30, 2016USD ($)
Income Tax Disclosure [Abstract]
Deferred Tax Assets, Valuation Allowance	$ 3.3