10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549 

FORM 10-Q

(Mark one)

☒QUARTERLY REPORT PURSUANT TO SECTION 13 or 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the Quarterly Period ended July 31, 2016

OR

☐TRANSITION REPORT PURSUANT TO SECTION 13 or 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from __________ to __________

Commission File No. 1-8061

FREQUENCY ELECTRONICS, INC.

(Exact name of Registrant as specified in its charter)

Delaware	11-1986657
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
55 CHARLES LINDBERGH BLVD., MITCHEL FIELD, N.Y.	11553
(Address of principal executive offices)	(Zip Code)

Registrant's telephone number, including area code: 516-794-4500

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.   Yes ☒   No ☐

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).   Yes ☒   No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company.  See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer ☐	Accelerated filer ☐	Non-accelerated filer ☐	Smaller Reporting Company ☒
		(do not check if a smaller reporting company)

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).   Yes ☐   No ☒

APPLICABLE ONLY TO CORPORATE ISSUERS:

The number of shares outstanding of Registrant's Common Stock, par value $1.00 as of September 9, 2016 – 8,729,682

FREQUENCY ELECTRONICS, INC. and SUBSIDIARIES

TABLE OF CONTENTS

Part I. Financial Information:	Page No.
Item 1 - Financial Statements:
Condensed Consolidated Balance Sheets – July 31, 2016 (unaudited) and April 30, 2016	3
Condensed Consolidated Statements of Income and Comprehensive Income (unaudited) Three Months Ended July 31, 2016 and 2015	4
Condensed Consolidated Statements of Cash Flows (unaudited) Three Months Ended July 31, 2016 and 2015	5
Notes to Condensed Consolidated Financial Statements (unaudited)	6-11
Item 2 - Management's Discussion and Analysis of Financial Condition and Results of Operations	12-17
Item 3 - Quantitative and Qualitative Disclosures About Market Risk	17
Item 4 - Controls and Procedures	17
Part II. Other Information:
Item 6 - Exhibits	18
Signatures	19

PART I. FINANCIAL INFORMATION  

Item 1.  Financial Statements

FREQUENCY ELECTRONICS, INC. and SUBSIDIARIES

Condensed Consolidated Balance Sheets

	July 31,			April 30,
	2016			2016
	(UNAUDITED)
	(In thousands except par value)
ASSETS:
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
LIABILITIES AND STOCKHOLDERS' EQUITY:
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

See accompanying notes to condensed consolidated financial statements.

3

FREQUENCY ELECTRONICS, INC. and SUBSIDIARIES

Condensed Consolidated Statements of Income and Comprehensive (Loss) Income

Three Months Ended July 31,

(Unaudited)

	2016			2015
	(In thousands except per share data)
Condensed Consolidated Statements of Income
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		-			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	$	(0.08	)	$	0.10
Diluted	$	(0.08	)	$	0.10
Weighted average shares outstanding
Basic		8,762			8,706
Diluted		8,762			8,984
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		-			(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

See accompanying notes to consolidated condensed financial statements.

4

 FREQUENCY ELECTRONICS, INC. and SUBSIDIARIES

Condensed Consolidated Statements of Cash Flows

Three Months Ended July 31,

(Unaudited)

	2016			2015
	(In thousands)
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		-			(172	)
Purchase of marketable securities		-			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		-			-
Payment of credit line borrowings		-			-
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
Supplemental disclosures of cash flow information:
Cash paid during the period for:
Interest	$	38		$	24
Income Taxes	$	70		$	230

See accompanying notes to condensed consolidated financial statements.

5

FREQUENCY ELECTRONICS, INC. and SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

(Unaudited)

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

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 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. If contract losses are anticipated, costs and estimated earnings in excess of billings are reduced for the full amount of such losses when they are determinable.

6

FREQUENCY ELECTRONICS, INC. and SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

(Unaudited)

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

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. The Company buys inventory in bulk quantities which may be used over significant time periods; due to its nature the inventory does not deteriorate.

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.

7

FREQUENCY ELECTRONICS, INC. and SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

(Unaudited)

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, 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.  On March 29, 2016, the Company renegotiated the $1 million dollar amendment under the original agreement dated October 22, 2012 to $602,000 due to the U.S. Government easing of export regulations.  Of this amount $392,500 was billed and paid during FY 2016.  During the three months ended July 31, 2016, sales to Morion included $10,000 under this agreement. The remaining amount will be billed in December 2016.

8

FREQUENCY ELECTRONICS, INC. and SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

(Unaudited)

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

9

FREQUENCY ELECTRONICS, INC. and SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

(Unaudited)

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 – 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. The amendments impact several aspects of accounting for share-based payment transactions, including the income tax consequences, forfeitures, classification of awards as either equity or liabilities, and classification on the statement of cash flows. This guidance requires a mix of prospective, modified retrospective, and retrospective transition to all annual and interim periods presented and is effective for the Company beginning in fiscal 2018. The Company has not determined the full impact of implementation of this standard, but does not expect it will have a material effect on the Company’s financial condition or results of operations.

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. The amendments in ASU 2015-17 seek to simplify the presentation of deferred income taxes and require that deferred tax liabilities and assets be classified as noncurrent in a classified statement of financial position. ASU 2015-17 is effective for financial statements issued for annual periods beginning after December 15, 2016, and interim periods within those annual periods, with early application permitted for all entities as of the beginning of an interim or annual reporting period. The Company has not determined the full impact of implementation of this standard, but believes it will not be material to net income.  The Company believes that the main impact of adoption of the standard will be the reclassification of current deferred tax assets to an increase in noncurrent deferred tax assets for the period ending April 30, 2018.

In July 2015, the FASB issued ASU 2015-11, Inventory (Topic 330): Simplifying the Measurement of Inventory (“ASU 2015-11”) which changes the measurement principle for inventory from the lower of cost or market to the lower of cost or net realizable value.  ASU 2015-11 defines net realizable value as estimated selling prices in the ordinary course of business, less reasonably predictable costs of completion, disposal and transportation.  The new guidance must be applied on a prospective basis and is effective for periods beginning after December 15, 2016, with early adoption permitted.  The Company is currently evaluating the effect that the new guidance will have on its consolidated financial statements.

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FREQUENCY ELECTRONICS, INC. and SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

(Unaudited)

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”), which is effective for annual periods after December 15, 2016 and for annual periods and interim periodsthereafter. Early application is permitted.  Under ASU 2014-15, entities will be required to formally assess their ability to continue as a going concern and provide disclosures under certain circumstances.  While current practice regarding such disclosures is often guided by U.S. auditing standards, the new standard explicitly requires the assessment at interim and annual periods, and provides management with its own disclosure guidance.  The standard can be adopted early.  The company is currently assessing the impact that adopting these new assessment and disclosure requirements will have on its financial statements and footnote disclosures.

In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606).  ASU 2014-09 eliminates most of the existing industry-specific revenue recognition guidance and significantly expands related disclosures.  The required disclosures will include both quantitative and qualitative information about the amount, timing and uncertainty of revenue from contracts with customers and the significant judgments used.  Entities can retrospectively apply ASU 2014-09 or use an alternative transition method.  In July 2015, the FASB approved a one-year deferral of the effective date of this ASU.  Although the amending ASU has not yet been issued, since it will be amended, this ASU is effective for public companies for annual reporting periods beginning on or after December 15, 2017 and for the Company, must be adopted for its fiscal year 2019 beginning on May 1, 2018.  The Company is in the process of determining the effect that ASU 2014-09 may have on its financial statements. 

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 under the Facility are all under Tranche A.  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.

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 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.

11

FREQUENCY ELECTRONICS, INC. and SUBSIDIARIES

Item 2.  Management’s Discussion and Analysis of Financial Condition and Results of Operations

“Safe Harbor” Statement under the Private Securities Litigation Reform Act of 1995:

The statements in this quarterly report on Form 10-Q regarding future earnings and operations and other statements relating to the future constitute "forward-looking" statements pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995.  The words "believe," "may," "will," "could," "should," "would," "anticipate," "estimate," "expect," "project," "intend," "objective," "seek," "strive," "might," "likely result," "build," "grow," "plan," "goal," "expand," "position," or similar words, or the negatives of these words, or similar terminology, identify forward-looking statements.  These statements are based on assumptions that the Company believes are reasonable, but are subject to a wide range of risks and uncertainties, and a number of factors could cause the Company's actual results to differ materially from those expressed in the forward-looking statements referred to above.  Factors that would cause or contribute to such differences include, but are not limited to, continued acceptance of the Company's products in the marketplace, competitive factors, new products and technological changes, product prices and raw material costs, dependence upon third-party vendors, competitive developments, changes in manufacturing and transportation costs, changes in contractual terms, the availability of capital, and other risks detailed in the Company's periodic report filings with the Securities and Exchange Commission.  Readers are cautioned not to place undue reliance on these forward-looking statements, which relate only to events as of the date on which the statements are made and which reflect management's analysis, judgments, belief, or expectation only as of such date.  By making these forward-looking statements, the Company undertakes no obligation to update these statements for revisions or changes after the date of this report.

Critical Accounting Policies and Estimates

The Company’s significant accounting policies are described in Note 1 to the consolidated financial statements included in the Company’s Annual Report on Form 10-K for the year ended April 30, 2016.  The Company believes its most critical accounting policies to be the recognition of revenue and costs on production contracts and the valuation of inventory.  Each of these areas requires the Company to make use of reasoned estimates including estimating the cost to complete a contract, the realizable value of its inventory or the market value of its products.  Changes in estimates can have a material impact on the Company’s financial position and results of operations.

Revenue Recognition

Revenues under larger, long-term contracts which generally require billings based on achievement of milestones rather than delivery of product, are reported in operating results using the percentage of completion method.  On fixed-price contracts, which are typical for commercial and U.S. Government satellite programs and other long-term U.S. Government projects, and which require initial design and development of the product, revenue is recognized on the cost-to-cost method.  Under this method, revenue is recorded based upon the ratio that incurred costs bear to total estimated contract costs with related cost of sales recorded as the costs are incurred.  Each month management reviews estimated contract costs through a process of aggregating actual costs incurred and estimating additional costs to completion based upon the current available information and status of the contract.  The effect of any change in the estimated gross margin percentage for a contract is reflected in revenues in the period in which the change is known.  Provisions for anticipated losses on contracts are made in the period in which they become determinable.

On production-type orders, revenue is recorded as units are delivered with the related cost of sales recognized on each shipment based upon a percentage of estimated final program costs.

Changes in job performance on long-term contracts and production-type orders may result in revisions to costs and income and are recognized in the period in which revisions are determined to be required.  Provisions for anticipated losses on customer orders are made in the period in which they become determinable.

For customer orders in the Company’s Gillam-FEI and FEI-Zyfer segments or smaller contracts or orders in the FEI-NY segment, sales of products and services to customers are reported in operating results based upon (i) shipment of the product or (ii) performance of the services pursuant to terms of the customer order.  When payment is contingent upon customer acceptance of the installed system, revenue is deferred until such acceptance is received and installation completed.

Costs and Expenses

Contract costs include all direct material, direct labor costs, manufacturing overhead and other direct costs related to contract performance.  Selling, general and administrative costs are charged to expense as incurred.

12

FREQUENCY ELECTRONICS, INC. and SUBSIDIARIES

(Continued)

Inventory

In accordance with industry practice, inventoried costs contain amounts relating to contracts and programs with long production cycles, a portion of which will not be realized within one year.  Inventory write downs are established for slow-moving, obsolete items and costs incurred on programs for which production-level orders cannot be determined as probable.  Such write downs are based upon management’s experience and expectations for future business.  Any changes arising from revised expectations are reflected in cost of sales in the period the revision is made.

Marketable Securities

All of the Company’s investments in marketable securities are Level 1 securities which trade on public markets and have current prices that are readily available.  In general, investments in fixed price securities are only in the commercial paper of financially sound corporations or the bonds of U.S. Government agencies.  Although the value of such investments may fluctuate significantly based on economic factors, the Company’s own financial strength enables it to wait for the securities to either recover their value or to mature such that any interim unrealized gains or losses are deemed to be temporary.

RESULTS OF OPERATIONS

The table below sets forth for the respective periods of fiscal years 2017 and 2016 (which end on April 30, 2017 and 2016, respectively) the percentage of consolidated revenues represented by certain items in the Company’s consolidated statements of operations:

	Three months ended July 31,
	2016			2015
Revenues
FEI-NY		78.6	%		80.9	%
Gillam-FEI		9.2			8.4
FEI-Zyfer		18.4			12.6
Less intersegment revenues		(6.2	)		(1.9	)
		100.0			100.0
Cost of revenues		67.6			65.4
Gross margin		32.4			34.6
Selling and administrative expenses		26.2			22.1
Research and development expenses		12.5			6.9
Operating (loss) profit		(6.3	)		5.6
Other income, net		0.4			3.9
Pretax (loss) income		(5.9	)		9.5
Provision (benefit) for income taxes		(0.3	)		4.2
Net (loss) income		(5.6	)%		5.3	%

Revenues
	Three months ended July 31, (in thousands)
	2016			2015			Change
FEI-NY	$	9,982		$	13,494		$	(3,512	)	(26	%)
Gillam-FEI		1,168			1,407			(239	)	(17	%)
FEI-Zyfer		2,346			2,100			246		12	%
Intersegment revenues		(788	)		(321	)		(467	)
	$	12,708		$	16,680		$	(3,972	)	(24	%)

13

FREQUENCY ELECTRONICS, INC. and SUBSIDIARIES

(Continued)

For the three months ended July 31, 2016, revenues from commercial and U.S. Government satellite programs decreased approximately $3.2 million over the same period of fiscal year 2016, and accounted for approximately 50% of consolidated revenues compared to approximately 55% in fiscal 2016.  The primary reason for the reduction of revenues in this market is the delay in awards in U.S. Governments satellite programs.  Revenues on these contracts are recognized primarily under the percentage of completion method.  Revenues from the satellite market are recorded in the FEI-NY segment.  Revenues from non-space U.S. Government/DOD customers, which are recorded in both the FEI-NY and FEI-Zyfer segments, were relatively flat compared to the same period of fiscal year 2016, and accounted for approximately 26% of consolidated revenues compared to approximately 20% for the same period in fiscal 2016.  Network infrastructure and other industrial revenues in the fiscal year 2017 periods accounted for approximately 24% of consolidated revenues which is similar to the prior year.  Intersegment sales are eliminated in consolidation and have no effect on consolidated revenues.

For the three months ended July 31, 2015, revenues from commercial and U.S. Government satellite programs accounted for more than 55% of consolidated revenues but were lower than that recorded in the same period of fiscal year 2015 as certain programs were completed.  Revenues on these contracts are recorded in the FEI-NY segment and are recognized primarily under the percentage of completion method.  Revenues from non-space U.S. Government/DOD customers, which are recorded in both the FEI-NY and FEI-Zyfer segments, more than doubled over the prior year and accounted for approximately 20% of consolidated fiscal year 2016 revenues.  Network infrastructure and other industrial revenues in the fiscal year 2016 period, declined by approximately 30% from the same period of fiscal year 2015 and accounted for approximately 20% of consolidated revenues.  Such revenues are recorded in all three segments.  The primary reason for reduced revenue from this market area in the fiscal year 2016 period is the lack of third-party contract manufacturing revenues in the Company’s FEI-Asia subsidiary which is part of the FEI-NY segment.  Such third-party contract manufacturing business is sporadic and low margin and thus has little meaningful impact on the consolidated profits of the Company.

Based on the Company’s current backlog, of which satellite payload business comprises approximately 60%, and delays in awards of new project orders which are sole-sourced to the Company, revenues for fiscal year 2017 are expected to be comparable for the full year to the prior fiscal year.  Satellite payload revenues will remain the dominant portion of the Company’s business and represents the Company’s best long-term growth opportunity.  Revenues from non-space U.S. Government/DOD customers are expected to increase, particularly for the FEI-Zyfer segment, as it receives additional funding on several significant U.S. Government programs.

Gross margin

	Three months ended July 31,
	(in thousands)
	2016			2015			Change
	$	4,114		$	5,773		$	(1,659	)	(29	%)
GM Rate		32.4	%		34.6	%

For the three month period ended July 31, 2016 gross margin and gross margin rate decreased from the same period in fiscal 2016.  This was primarily due to decrease in sales and product mix. The decrease in sales resulted in an increase of unabsorbed overhead primarily in the FEI-NY Segment. The product mix included a higher component of cost relating to a multi-year low margin contracts.

Although consolidated revenues for the three month period ended July 31, 2015 were lower than the same period of fiscal year 2015, gross margin increased as a result of improved gross margin rates due to favorable contract and product mix.  In addition, during the quarter the Company received reimbursement from a vendor which partially offset higher engineering and production costs incurred on certain programs impacted by a defective part.  The cost reimbursement improved the consolidated gross margin rate by approximately 2%.

14

FREQUENCY ELECTRONICS, INC. and SUBSIDIARIES

(Continued)

Selling and administrative expenses

Three months ended July 31,
2016		2015		Change
$	3,326	$	3,685	$	(359	)	(10	%)

For the three-month periods ended July 31, 2016 and 2015, selling and administrative ("SG&A”) expenses were approximately 26% and 22%, respectively, of consolidated revenues.  The dollar amount of SG&A expenses decreased by 10% and was primarily recognized in the FEI-NY segment. The largest components were lower incentive compensation and marketing expenses offset partially by an increase in deferred compensation expense.

Research and development expense

Three months ended July 31,
2016		2015		Change
$	1,584	$	1,147	$	437	38	%

Research and development (“R&D”) expenditures represent investments intended to keep the Company’s products at the leading edge of time and frequency technology and enhance competitiveness for future revenues.  R&D spending for the three months ended July 31, 2016, increased due to accelerate prototype development of products addressing secure communications applications.  The current rate of 12% exceeds our target of 10% of sales, while the rate may decrease during the balance of the year, it is unlikely to meet our target of 10%.

Operating profit

Three months ended July 31,
2016			2015		Change
$	(796	)	$	941	$	(1,737	)	(185	%)

Lower gross margins on reduced consolidated revenues coupled with higher R&D spending resulted in decreased operating profits for the fiscal year 2016 periods as compared to fiscal year 2015.

Other income (expense)

	Three months ended July 31,
	2016			2015			Change
Investment income	$	92		$	271		$	(179	)		(66	%)
Interest expense		(42	)		(24	)		(18	)		75	%
Other income (expense), net		-			403			(403	)	NM
	$	50		$	650		$	(600	)		(92	%)

Investment income is derived primarily from the Company’s holdings of marketable securities.  Earnings on these securities may vary based on fluctuating interest rates and dividend payout levels and the timing of purchases or sales of securities.  No gains were recorded during the three months ended July 31, 2016 as compared to approximately $137,000 in the same period of fiscal year 2016.

The increase in interest expense for the three months ended July 31, 2016 compared to the same period of fiscal year 2016 is due to higher interest expense on deferred comp payments.

During the first quarter of fiscal year 2016, the Company recognized a gain of approximately $400,000 from the proceeds of a life insurance policy upon the death of a former officer of the Company.

15

FREQUENCY ELECTRONICS, INC. and SUBSIDIARIES

(Continued)

Income tax provision

	Three months ended July 31,
	2016			2015			Change
	$	(40	)	$	700		$	(740	)	(106	%)
Effective tax rate on pre-tax book income:
		5.4	%		44.0	%

The effective tax rate for the quarter ended July 31, 2016 is 5.4% compared to 44% in the quarter ended July 31, 2015. The current and prior year effective tax rates reflect the impact of deductible permanent differences included in the computation of taxable income as well as losses generated by non-domestic operations for which no tax benefit is recognized. The decrease in the effective tax rate is primarily due to changes in the earnings mix between U.S. and non-domestic operations. Consequently, for the three months ended July 31, 2016 and 2015, the Company recorded an income tax benefit of $40 and an income tax provision of $700, respectively.

Based upon the Company’s anticipated earnings in the U.S., the Company’s estimated annual effective tax rate for fiscal 2017, excluding discrete items, is estimated to be approximately 32%. Due to historical losses, the Company does not recognize an income tax benefit on pretax losses generated by its non-domestic operations.  The Company’s projected annual effective tax rate is lower than the federal statutory rate of 34% primarily due to the impact of deductible permanent differences included in the computation of U.S. taxable income. The Company utilizes the availability of R&D credits and the Domestic Productions Activity deduction in the U.S. to lower its effective tax rate.

Net (loss) income

Three months ended July 31,
2016			2015		Change
$	(706	)	$	891	$	(1,597	)	(179	%)

As detailed above, operating profits and pretax income were lower for the period ended July 31, 2016 as compared to the same periods of fiscal year 2016 resulting in reduced net income for the period ended July 31, 2016.

LIQUIDITY AND CAPITAL RESOURCES

The Company’s balance sheet continues to reflect a strong working capital position of $75.6 million at July 31, 2016 and April 30, 2016.  Included in working capital at July 31, 2016 and April 30 2016, is $15.6 million and $17.2 million, respectively, consisting of cash, cash equivalents and marketable securities.  The Company’s current ratio at July 31, 2016 is 9.3 to 1.

For the three months ended July 31, 2016 and 2015 the Company used cash from operations in the amount of $571,000 compared to the use of cash from operating activities of $1.8 million in the comparable fiscal year 2016 period.  The decreased cash flow in the fiscal year 2017 period resulted primarily from increase in accounts receivable plus an increase in inventory compared to the balances as of the end of the previous fiscal year offset by an increase in accounts payable.For the three-month periods ended July 31, 2016 and 2015, the Company incurred approximately $1.6 million and $1.2 million, respectively, of non-cash operating expenses such as depreciation and amortization and accruals for employee benefit programs.

Net cash used in investing activities for the three months ended July 31, 2016, was $1.1 million compared to $65,000 used in the same period of fiscal year 2016.  There were no sales or redemptions of marketable securities during the three months ended July 31, 2016 compared to $713,000 of such redemptions during the fiscal year 2016 period.  Some of these proceeds and other cash were reinvested in additional marketable securities for the period ended July 31, 2015 in the amount of $172,000.  In the fiscal quarters ended July 31, 2016 and 2015, the Company acquired property, plant and equipment in the amount of approximately $1.1 million and $606,000, respectively.  The Company may continue to invest cash equivalents in longer-term securities or to convert short-term investments to cash equivalents as dictated by its investment and acquisition strategies.  The Company will continue to acquire more efficient equipment to automate its production process.  The Company expects to spend between $2.5 million and $3.5 million on capital equipment during fiscal year 2017.  Internally generated cash or additional borrowings under the Company’s credit facility will be used to acquire this level of capital equipment.

16

FREQUENCY ELECTRONICS, INC. and SUBSIDIARIES

(Continued)

Net cash provided by financing activities for the three months ended July 31, 2016 and 2015 was $1,000 and $8,000, respectively.  For the three months ended July 31, 2016 and 2015, the Company realized $1,000 and $8,000, respectively, from the tax benefits arising from the exercise of stock-based awards.   There were no additional borrowings or repayments during the first three months of fiscal 2017 or the full fiscal year 2016.

The Company has been authorized by its Board of Directors to repurchase up to $5 million worth of shares of its common stock for treasury whenever appropriate opportunities arise but it has neither a formal repurchase plan nor commitments to purchase additional shares in the future.  As of July 31, 2016, the Company has repurchased approximately $4 million of its common stock out of the $5 million authorization.  For the three months ended July 31, 2016 and 2015, there were no repurchase of shares.

The Company will continue to expend resources to develop, improve and acquire products for space applications, guidance and targeting systems, and communication systems which management believes will result in future growth and continued profitability.  During fiscal year 2017, the Company intends to make a substantial investment of capital and technical resources to develop and acquire new products to meet the needs of the U.S. Government, commercial space and network infrastructure marketplaces and to invest in more efficient product designs and manufacturing procedures.  Where possible, the Company will secure partial customer funding for such development efforts but is targeting to spend its own funds at a rate of less than 10% of revenues to achieve its development goals.  Internally generated cash will be adequate to fund these development efforts.  The Company may also pursue acquisitions to expand its range of products and may use internally generated cash and external funding in connection with such acquisitions.

As of July 31, 2016, the Company's consolidated funded backlog is approximately $36 million compared to $32 million at April 30, 2016, the end of fiscal year 2016.  Approximately 75% of this backlog is expected to be realized in the next twelve months.  Included in the backlog at July 31, 2016 is approximately $9.7 million under cost-plus-fee contracts which the Company believes represent firm commitments from its customers for which the Company has not received full funding to-date.  The Company excludes from backlog any contracts or awards for which it has not received authorization to proceed and on fixed price contracts excludes any unfunded portion. The Company expects these contracts to become fully funded over time and will add to its backlog at that time.

The Company believes that its liquidity is adequate to meet its operating and investment needs through at least September 14, 2017.

Off-Balance Sheet Arrangements

The Company does not have any off-balance sheet arrangements, other than operating leases, that have or are reasonably likely to have a current or future effect on the Company’s financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that is material to investors.

Item 3.  Quantitative and Qualitative Disclosures About Market Risk

Not applicable.

Item 4.  Controls and Procedures

Disclosure Controls and Procedures. The Company’s management, with the participation of the Company’s chief executive officer and chief financial officer, has evaluated the effectiveness of the Company’s disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) as of the end of the period covered by this report.  There are inherent limitations to the effectiveness of any system of disclosure controls and procedures, including the possibility of human error and the circumvention or overriding of the controls and procedures.  Accordingly, even effective disclosure controls and procedures can only provide reasonable assurance of achieving their control objectives.  Based on their evaluation, the Company’s chief executive officer and chief financial officer have concluded that, as of July 31, 2016, the Company’s disclosure controls and procedures were effective to ensure that information relating to the Company, including its consolidated subsidiaries, required to be included in its reports that it filed or submitted under the Exchange Act are recorded, processed, summarized and reported within the time periods specified in Securities and Exchange Commission rules and forms.

Changes in Internal Control Over Financial Reporting. There were no changes in the Company’s internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the three months ended July 31, 2016 to which this report relates that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

17

PART II. OTHER INFORMATION

Item 6.  Exhibits

31.1 -	Certification by the Chief Executive Officer pursuant to Rule 13a-14(a) or 15d-14(a) under the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2 -	Certification by the Chief Financial Officer pursuant to Rule 13a-14(a) or 15d-14(a) under the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32 -	Certifications by the Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101-	The following materials from the Frequency Electronics, Inc. Quarterly Report on Form 10-Q for the quarter ended July 31, 2016 formatted in eXtensible Business Reporting Language (XBRL): (i) Condensed Consolidated Balance Sheets, (ii) Condensed Consolidated Statements of Income and Comprehensive Income, (iii) Condensed Consolidated Statements of Cash Flows and (iv) Notes to Condensed Consolidated Financial Statements.

18

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

FREQUENCY ELECTRONICS, INC.

(Registrant)

Date: September 14, 2016                                                                        BY   /s/   Steven L. Bernstein                                 

Steven L. Bernstein

Chief Financial Officer

Signing on behalf of the registrant and as principal financial officer

19

EX-31.1

Exhibit 31.1

CERTIFICATION PURSUANT TO

SECTION 302 OF

THE SARBANES-OXLEY ACT OF 2002

I, Martin Bloch, certify that:

1.  I have reviewed this quarterly report on Form 10-Q of Frequency Electronics, Inc.;

2.  Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.  Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.  The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a)  Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)  Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c)  Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)  Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.  The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a)  All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b)  Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

  /s/   Martin Bloch                                                                                            September 14, 2016

Martin Bloch

Chief Executive Officer

EX-31.2

Exhibit 31.2

CERTIFICATION PURSUANT TO

SECTION 302 OF

THE SARBANES-OXLEY ACT OF 2002

I, Steven L. Bernstein, certify that

1.  I have reviewed this quarterly report on Form 10-Q of Frequency Electronics, Inc.;

2.  Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.  Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.  The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a)  Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)  Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c)  Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)  Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.  The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a)  All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b)  Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

  /s/   Steven L. Bernstein                                                                                 September 14, 2016

Steven L. Bernstein

Chief Financial Officer

EX-32

Exhibit 32

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350

ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

Certification of CEO

In connection with the Quarterly Report of Frequency Electronics, Inc. (the “Company”) on Form 10-Q for the period ended July 31, 2016 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Martin Bloch, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to my knowledge:

(1)  The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2)  The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

  /s/   Martin Bloch                                                                                              September 14, 2016

Martin Bloch

Chief Executive Officer

******************

Certification of CFO

In connection with the Quarterly Report of Frequency Electronics, Inc. (the “Company”) on Form 10-Q for the period ended July 31, 2016 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Steven L. Bernstein, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to my knowledge:

(1)  The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2)  The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

  /s/   Steven L. Bernstein                                                                                  September 14, 2016

Steven L. Bernstein

Chief Financial Officer

A signed original of this written statement required by Section 906, or other document authenticating, acknowledging, or otherwise adopting the signature that appears in typed form within the electronic version of this written statement required by Section 906, has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.

This certification accompanies this Report on Form 10-Q pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and shall not, except to the extent required by such Act, be deemed filed by the Company for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”).  Such certification will not be deemed to be incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Exchange Act, except to the extent that the Company specifically incorporates it by reference.

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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	0000039020
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	2017
Document Fiscal Period Focus	Q1

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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

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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)	$ 1.00	$ 1.00
Preferred stock - shares authorized	600	600
Preferred stock - shares issued	0	0
Common stock, par value (in Dollars per share)	$ 1.00	$ 1.00
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

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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

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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

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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

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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.

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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

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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. If contract losses are anticipated, costs and estimated earnings in excess of billings are reduced for the full amount of such losses when they are determinable.

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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.

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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. The Company buys inventory in bulk quantities which may be used over significant time periods; due to its nature the inventory does not deteriorate.

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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

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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.  On March 29, 2016, the Company renegotiated the $1 million dollar amendment under the original agreement dated October 22, 2012 to $602,000 due to the U.S. Government easing of export regulations.  Of this amount $392,500 was billed and paid during FY 2016.  During the three months ended July 31, 2016, sales to Morion included $10,000 under this agreement. The remaining amount will be billed in December 2016.

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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.

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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. The amendments impact several aspects of accounting for share-based payment transactions, including the income tax consequences, forfeitures, classification of awards as either equity or liabilities, and classification on the statement of cash flows. This guidance requires a mix of prospective, modified retrospective, and retrospective transition to all annual and interim periods presented and is effective for the Company beginning in fiscal 2018. The Company has not determined the full impact of implementation of this standard, but does not expect it will have a material effect on the Company’s financial condition or results of operations.

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. The amendments in ASU 2015-17 seek to simplify the presentation of deferred income taxes and require that deferred tax liabilities and assets be classified as noncurrent in a classified statement of financial position. ASU 2015-17 is effective for financial statements issued for annual periods beginning after December 15, 2016, and interim periods within those annual periods, with early application permitted for all entities as of the beginning of an interim or annual reporting period. The Company has not determined the full impact of implementation of this standard, but believes it will not be material to net income.  The Company believes that the main impact of adoption of the standard will be the reclassification of current deferred tax assets to an increase in noncurrent deferred tax assets for the period ending April 30, 2018.

In July 2015, the FASB issued ASU 2015-11, Inventory (Topic 330): Simplifying the Measurement of Inventory (“ASU 2015-11”) which changes the measurement principle for inventory from the lower of cost or market to the lower of cost or net realizable value.  ASU 2015-11 defines net realizable value as estimated selling prices in the ordinary course of business, less reasonably predictable costs of completion, disposal and transportation.  The new guidance must be applied on a prospective basis and is effective for periods beginning after December 15, 2016, with early adoption permitted.  The Company is currently evaluating the effect that the new guidance will have on its consolidated financial statements.

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”), which is effective for annual periods after December 15, 2016 and for annual periods and interim periodsthereafter. Early application is permitted.  Under ASU 2014-15, entities will be required to formally assess their ability to continue as a going concern and provide disclosures under certain circumstances.  While current practice regarding such disclosures is often guided by U.S. auditing standards, the new standard explicitly requires the assessment at interim and annual periods, and provides management with its own disclosure guidance.  The standard can be adopted early.  The company is currently assessing the impact that adopting these new assessment and disclosure requirements will have on its financial statements and footnote disclosures.

In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606).  ASU 2014-09 eliminates most of the existing industry-specific revenue recognition guidance and significantly expands related disclosures.  The required disclosures will include both quantitative and qualitative information about the amount, timing and uncertainty of revenue from contracts with customers and the significant judgments used.  Entities can retrospectively apply ASU 2014-09 or use an alternative transition method.  In July 2015, the FASB approved a one-year deferral of the effective date of this ASU.  Although the amending ASU has not yet been issued, since it will be amended, this ASU is effective for public companies for annual reporting periods beginning on or after December 15, 2017 and for the Company, must be adopted for its fiscal year 2019 beginning on May 1, 2018.  The Company is in the process of determining the effect that ASU 2014-09 may have on its financial statements. 

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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 under the Facility are all under Tranche A.  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.

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.

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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.

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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

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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

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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

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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

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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

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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

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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.

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

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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

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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

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NOTE D - TREASURY STOCK TRANSACTIONS (Details)	3 Months Ended
	Jul. 31, 2016 shares
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

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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

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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

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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

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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)

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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)

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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

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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

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NOTE G - INVESTMENT IN MORION, INC. (Details) - Morion Inc [Member] - USD ($)		3 Months Ended
	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

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NOTE H - FAIR VALUE OF FINANCIAL INSTRUMENTS (Details) $ in Millions	3 Months Ended
	Jul. 31, 2016 USD ($)
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

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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

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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)

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NOTE H - FAIR VALUE OF FINANCIAL INSTRUMENTS (Details) - Investments Classified by Contractual Maturity Date - Fixed Income Securities [Member] $ in Thousands	Jul. 31, 2016 USD ($)
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

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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. 05, 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%

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