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Frequency Electronics Inc

FEIM · Technology (instruments for meas & testing of electricity & elec signals) · 10 years of annual accounts filed with the SEC · latest fiscal year ended 2026-04-30

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Frequency Electronics Inc reported revenue of $63.2 million in fiscal 2026, after growing 5.4% a year over the previous 9 years. Its operating margin widened from -31.5% in 2018 to -4.7%. Of the $29.0 million its operations generated over 10 years, 65.3% went to dividends and 54.7% back into the business; the share count rose 10.7%. On the accounting screens, it passes 3 of 8 Piotroski tests, its Altman Z'' of 3.56 is in the safe zone and its Beneish M-score is below the -1.78 line; 1 of the six cross-checks between its statements fires.

Revenue, fiscal 2026 63.2M +5.4% a year over 9 years
Operating margin -4.7% gross margin 29.1%
Return on invested capital —  
Free cash flow after stock pay -3.6M -5.6% of revenue
Net debt ÷ EBITDA — net debt —
Piotroski F-score 3/8 tests of improvement passed

Is it growing?

Revenue and the operating income it turns into. Growth that does not reach operating income is growth bought with margin.

RevenueOperating income
Compound growth a year
3 yrs5 yrs9 yrs
Revenue+15.7%+3.1%+5.4%
Shares+1.6%+1.1%+1.1%

Falling shares are buybacks: each remaining share owns more of the company.

Does it earn more than its capital costs?

Margins say how much of each sale is kept; return on invested capital says how much the business earns on the money it needs to operate. Growth only creates value when that return is above the cost of the capital.

GrossOperatingNetFree cash flow

Return on invested capital

Return on invested capital

Economic profit

Needs a cost of capital, which comes from the valuation below.

Return on equity
-1.6%
Return on assets
-1.0%
Asset turnover
0.70×
Research & development
9.5% of revenue
Overheads (SG&A)
24.4% of revenue

Is the profit cash, and where does the cash go?

Net income is an accounting opinion; free cash flow is what was left in the bank after investing. Stock-based pay does not leave the bank — shareholders pay it through dilution — so it is shown taken off as well.

Net incomeFree cash flowAfter stock-based pay

Where 10 years of operating cash went, 2018–2026

29.0M generated by the business. Each band is its share of that total.

  • Reinvested in the business 55% 15.8M
  • Acquisitions 0% 0
  • Dividends 65% 18.9M
  • Share buybacks 7% 2.0M
  • More than it generated: funded with cash or new debt -27% -7.8M

Over the same years it paid 6.0M in stock. The share count rose 10.7%. The buybacks did not even cover what was handed out in stock.

Per share

Earnings per shareFree cash flow per shareDividend per share

Shares outstanding

Diluted shares

How strong is the balance sheet?

Debt is not bad in itself; debt the business cannot service in a bad year is. Net debt is debt minus cash, and below zero the company holds more cash than it owes.

Net debt
Net debt ÷ EBITDA
—
Interest coverage
-34× operating income ÷ interest
Current ratio
2.29 current assets ÷ current liabilities
Cash conversion cycle
— collects in 27d

Three classic screens of the accounts

Each asks a different question of the same statements — is it improving, does it look like a company heading for distress, do the accounts resemble ones that were manipulated. None is a verdict; each shows what moves it.

Piotroski F-score

Is the business improving? Nine yes-or-no tests, this year against last.

3of 8 tests passed
  • ProfitableReturn on assets above zero failed
  • Cash from operationsOperating cash flow above zero passed
  • Profitability improvedReturn on assets higher than a year before failed
  • Profit backed by cashOperating cash flow above net income (low accruals) passed
  • Less long-term debtLong-term debt as a share of assets fell — not reported no data
  • More liquidCurrent ratio higher than a year before passed
  • No new sharesShare count did not grow failed
  • Better gross marginGross margin higher than a year before failed
  • Sells more per assetAsset turnover higher than a year before failed

Where it misleads: it measures change, not level. An excellent business that stood still for a year scores low; a poor one recovering from a disaster scores high.

Altman Z''-score

Does the balance sheet look like those of companies that went bankrupt?

3.56safe zone
  • Working capital ÷ assets 0.30 × 6.56+1.95
  • Retained earnings ÷ assets 0.03 × 3.26+0.10
  • Operating income ÷ assets -0.03 × 6.72-0.22
  • Equity ÷ liabilities 1.64 × 1.05+1.73

Where it misleads: buybacks. A company that returns so much cash that its equity turns small or negative sinks the last two ratios without being anywhere near bankruptcy. Banks and insurers do not fit the model at all.

Beneish M-score

Do the accounts resemble those of companies that manipulated their earnings?

-2.52below the -1.78 line
  • Receivables vs sales 0.88+0.81
  • Gross margin slipping 1.48+0.78
  • Soft assets 1.07+0.43
  • Sales growth 0.91+0.81
  • Slower depreciation 1.19+0.14
  • Overheads vs sales 1.38-0.24
  • Profit not in cash -0.02-0.11
  • Leverage rising 0.92-0.30

Where it misleads: fast growth and acquisitions. Sales growth carries a heavy weight, so a company growing 50% a year scores like a suspect without having done anything. It is a screen from a 1999 study, not an accusation.

Where the statements disagree

Cross-checks between the income statement, the balance sheet and the cash flow for the latest year, each with the benign reading and the worrying one.

The effective tax rate is -68.9%.

Benign

A favourable geographic mix, or legitimate tax credits.

Worrying

Not sustainable; projecting it forward inflates the valuation.

What is it worth, under which assumptions?

A company is worth the cash it will generate, brought back to today. This model projects revenue with growth that fades over the years, applies a free cash flow margin, and discounts the result at the cost of capital. Every assumption says where it came from, and all of them can be changed.

Revenue
M $

revenue of fiscal 2026

%

revenue grew +3.1% a year over the last 5 years; it fades to the terminal rate by the last year

yrs

ten years for growth to fade to the terminal rate

Cash from each sale
%

free cash flow to the firm after stock-based pay ÷ revenue, last 3 fiscal years together

%

the margin in year ten; by default the business keeps today's

The long run
%

growth forever after year ten, below the risk-free rate: no company outgrows the economy forever

The discount rate
%

10-year US Treasury par yield (U.S. Treasury), 2026-09-25

not measured on this public page, which uses only public filings: 1.0 assumes it moves like the market. Sign in to measure it from prices

%

the extra return demanded for holding shares; it cannot be measured, and 4–6% is the common range

%

no interest line: the risk-free rate + 1.5 points

%

effective rate in the last fiscal year, -68.9%, kept within 0–35%

The price
$

Type the price you see at your broker. It is used only for the reverse questions: what that price implies.

Back to the defaults

SEC from the filings Treasury the 10-year yield measured from prices assumption cannot be measured yours you changed it

With a free cash flow margin at or below zero in year ten, the business never generates cash for its owners and a DCF says nothing useful. Set a positive margin for year ten to see what it would take.

What it has filed lately

The last twelve months at the SEC, most important first: annual and quarterly reports, events, large holders and insiders.

Quarterly 2026-09-14
Quarterly report
Results 2026-09-10
Reported results
Event 2026-08-05
Published other information
Event 2026-07-30
Signed a material agreement
Shares 2026-07-30
New shares priced
Shares 2026-07-28
New shares priced
Shares 2026-07-17
Registering new shares
Annual 2026-07-17
Annual report
Estimatein 78d
Results for the period ending 2026-10-31

What its own directors and officers did

Every Form 4 filed in the last twelve months, read line by line: 4 filings by 5 people. Open-market purchases and sales are counted apart from awards, option exercises and shares withheld for taxes.

Bought on the open market—none in the period
Sold on the open market$37.5M2 sale(s) by 1 insider(s)
Under pre-arranged plans0%of the sales followed a 10b5-1 plan set months earlier
Other lines177 awards · 0 option exercises · 10 tax withholdings
DateWhoWhatSharesPriceValueHolds after
9 Sep 2026 Mcclelland ThomasPresident and CEO Received as an award 50,000 — — 220,861
31 Jul 2026 Mcclelland ThomasPresident and CEO Shares withheld for taxes 12,888 $57.97 $747,117 170,861
31 Jul 2026 Bernstein Steven LawrenceCFO Shares withheld for taxes 9,022 $57.97 $523,005 114,570
28 Jul 2026 Edenbrook Capital, LlcDirector Sold on the open market · indirect 97,826 $57.50 $5.6M 173,678
28 Jul 2026 Edenbrook Capital, LlcDirector Sold on the open market · indirect 554,348 $57.50 $31.9M 1.0M
30 Apr 2026 Bernstein Steven LawrenceCFO Received as an award 30,000 — — 126,842
30 Apr 2026 Mcclelland ThomasPresident and CEO Received as an award 50,000 — — 183,749
4 Jan 2026 Mcclelland ThomasPresident and CEO Shares withheld for taxes 6,629 $50.55 $335,096 133,749
4 Jan 2026 Bernstein Steven LawrenceCFO Shares withheld for taxes 5,341 $50.54 $269,934 96,842
1 Nov 2025 Bernstein Steven LawrenceCFO Shares withheld for taxes 92 $36.47 $3,355 102,183
1 Nov 2025 Mcclelland ThomasPresident and CEO Shares withheld for taxes 129 $36.68 $4,732 140,378
31 Jul 2025 Mcclelland ThomasPresident and CEO Shares withheld for taxes 12,888 $26.60 $342,821 140,507
31 Jul 2025 Mcclelland ThomasPresident and CEO Received as an award 50,000 — — 153,395
31 Jul 2025 Bernstein Steven LawrenceCFO Received as an award 40,000 — — 111,297
31 Jul 2025 Bernstein Steven LawrenceCFO Shares withheld for taxes 9,022 $26.60 $239,985 102,275
4 Jan 2025 Mcclelland ThomasPresident and CEO Shares withheld for taxes 6,947 $18.47 $128,311 103,395
4 Jan 2025 Bernstein Steven LawrenceCFO Shares withheld for taxes 4,140 $18.47 $76,466 71,297
31 Jul 2024 Bernstein Steven LawrenceCFO Received as an award 30,000 — — 75,437
27 Jul 2023 Bernstein Steven LawrenceCFO Received as an award 20,000 — — 45,437

A Form 4 says what happened, when, how many shares and at what price. It does not say why: a sale can be diversification, a tax bill or a plan fixed months earlier, and an award is pay, not a purchase. Nothing here is a reason to buy or sell anything.

Companies like this one

Same SEC industry (instruments for meas & testing of electricity & elec signals) first, then the rest of technology.

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Every figure, year by year

10 fiscal years · 30 measures
2018201820192020202120222023202420252026
Size
Revenue39.4M—49.5M41.5M54.3M48.3M40.8M55.3M69.8M63.2M
Revenue growth———-16.2%+30.7%-11.0%-15.6%+35.6%+26.3%-9.4%
Operating income-12.4M—-2.8M-10.9M-958,000-8.0M-4.7M5.0M11.7M-3.0M
Net income-23.8M—-2.5M-10.0M680,000-8.7M-5.5M5.6M23.7M-903,000
Margins
Gross margin13.1%—31.9%13.8%31.2%17.8%19.2%33.6%43.1%29.1%
Operating margin-31.5%—-5.7%-26.3%-1.8%-16.6%-11.5%9.1%16.8%-4.7%
Net margin-60.3%—-5.1%-24.2%1.3%-17.9%-13.5%10.1%33.9%-1.4%
Free cash flow margin7.9%—-5.8%-7.0%20.1%4.5%0.6%13.1%-4.6%-2.5%
R&D ÷ revenue17.6%—13.1%12.2%8.6%10.3%7.7%6.1%8.7%9.5%
SG&A ÷ revenue26.9%—24.4%27.9%24.3%24.1%23.0%18.4%17.6%24.4%
Cash
Free cash flow3.1M—-2.9M-2.9M10.9M2.2M257,0007.2M-3.2M-1.6M
Stock-based pay470,000—500,000312,000273,000247,000197,000822,0001.2M2.0M
Free cash flow after stock pay2.6M—-3.4M-3.2M10.6M1.9M60,0006.4M-4.4M-3.6M
Free cash flow to the firm-23.6M—-7.3M-8.3M3.7M-5.9M-4.2M2.6M-527,424-4.0M
Free cash flow ÷ net income-0.1×—1.1×0.3×16.1×-0.3×-0.0×1.3×-0.1×1.7×
Capex ÷ revenue3.6%—5.6%3.6%2.3%3.9%2.3%2.7%2.6%4.5%
Returns
Return on invested capital——-4.6%-21.2%——————
Return on equity-37.6%—-4.0%-18.5%1.2%-18.6%-16.7%14.0%42.6%-1.6%
Return on assets-28.4%—-2.9%-11.0%0.7%-10.2%-7.4%6.7%25.3%-1.0%
Asset turnover0.5×—0.6×0.5×0.6×0.6×0.5×0.7×0.7×0.7×
Economic profit——————————
Per share
Earnings per share$-2.69—$-0.28$-1.08$0.07$-0.93$-0.59$0.59$2.46$-0.09
Free cash flow per share$0.35—$-0.31$-0.31$1.18$0.23$0.03$0.77$-0.34$-0.16
Dividend per share—————$0.00$1.00$0.00$1.00$0.00
Payout ratio———————0.0%40.4%—
Book value per share$7.13—$7.03$5.95$6.01$5.02$3.51$4.19$5.73$5.72
Diluted shares8.8M—9.2M9.3M9.2M9.3M9.3M9.4M9.6M9.8M
Balance sheet
Net debt——-3.7M1.2M——————
Net debt ÷ EBITDA——245.5×-0.2×——————
Interest coverage-156.9×—-33.9×-102.1×-7.5×-104.4×-29.9×46.0×112.8×-34.5×
Current ratio9.9×9.8×9.0×3.7×3.2×2.6×1.8×1.9×2.3×2.3×
Cash conversion cycle (days)——————————
Scores
Piotroski F-score—011734753
Altman Z''5.94—6.043.003.712.521.142.744.583.56
Beneish M———-2.87-3.21-3.17-2.92-2.82-0.72-2.52

Accounts from the company's own SEC filings; lines some companies do not report are shown as a dash rather than estimated. The risk-free rate is the 10-year US Treasury yield. A DCF is a way of making assumptions explicit, not a forecast: it states what the company would be worth if the assumptions held. The scores are screens that point where to look, not verdicts. Nothing here is a recommendation to buy or sell.