Slide 1: Frequency Electronics, Inc. Needham Conference
FREQUENCY ELECTRONICS, INC. Needham Conference January 15, 2025
Slide 2: A Snapshot of Frequency Electronics, Inc. (FEI)
A Snapshot of Frequency Electronics, Inc. (FEI) FEI corporate LTM Corporate Headquarters • Revenue $60.2 M • Founded 1961 • Operating Profit $ 7.0 M • Mitchel Field, New York • ~ 220 Employees • 100,000 sqft: Laboratory, Engineering and Production Space Space Other 54% Related 46% • AS 9100C : 2009-
Slide 3: Corporate Overview
Corporate Overview Business Overview Applications World leader in quartz and rubidium high-precision time and frequency Secure Communicationsc (“T&F”) technology, and related quantum sensors Proven track record with a 55-year legacy in space (satellite payloads) Precision Strike Radar Transfor
Slide 4: The importance of time
The importance of time • Precise knowledge of time is an enabler – Atomic clocks on satellites made GPS navigation possible – Wireless, secure communication depends in many ways on precise synchronization • Neural networks of synchronized sensors, utilizing artificial intelligence make possible a va
Slide 5: Quantum Technology
Quantum Technology Current FEI markets Target FEI markets McKinsey: • Quantum sensors, 2025: $750M - $1M • Growth: 10-15%/year • Quantum overall: > $10B FEI Total Addressable Market is more than $10 B 5
Slide 6: Consolidated Financials, FY2022 – Present
Consolidated Financials, FY2022 – Present (millions, unless otherwise indicated) FY22 FY23 FY24 LTM Revenue $ 48.3 $ 40.8 $ 55.3 $ 60.2 Cost of Sales $ 39.7 $ 32.9 $ 36.7 $ 36.5 Gross Margin $ 8.6 $ 7.8 $ 18.6 $ 23.7 Gross Margin % 17.8% 19.2% 33.6% 46.3% SG&A $ 11.7 $ 9.4 $ 10.2 $ 11.6 R&D $ 5.0 $
Slide 7: Fully Vertically Integrated Business Model
Fully Vertically Integrated Business Model Engineered Raw Materials Finished Products Applications Components Quartz Spacecraft Quartz Bar Quartz Resonator Timing System Rubidium Rubidium Chloride Aging of lamps and cells Rb Atomic Clock Terrestrial Resonator Oscillator Ceramic (CRO) Ceramic Precisi
Slide 8: Voyager Space Exploration
Voyager Space Exploration 1977 • Provided quartz oscillators for Voyager 1 and 2 satellites • Launched in 1977, Voyager 1 and 2 intended for 7-year mission • Voyager 1 Quartz Oscillator Clock operated for 34 years! • Voyager 2 Quartz Oscillator Clock continues to function (47+ years)!! FEI’s oscilla
Slide 9: Position, Navigation, and Timing (PNT) Systems
Position, Navigation, and Timing (PNT) Systems Systems incorporating advanced atomic clocks and oscillators - 2003 • FEI’s Zyfer subsidiary provides advanced systems integrating state of the art GPS receivers with advanced frequency and time sources, and other sensors • Smart systems which utilize d
Slide 10: Iridium-Next Low Earth Orbit Satellite Constellation
Iridium-Next Low Earth Orbit Satellite Constellation 2013 L-Band Frequency Converter Assembly Master Frequency Generation Unit Automated Testing Sixteen high dynamic range half-duplex L- Band frequency converters Provides ultra stable reference frequency and local oscillator signals Quantities
Slide 11: Deep Space Atomic Clock (DSAC)
Deep Space Atomic Clock (DSAC) 2014 • Provided for deep Space NASA mission • Local oscillator used for Stored Ion Frequency Standard • Two oscillators delivered to NASA January 2014 • DSAC completed its on-orbit demonstration mission successfully in 2021 State of the art short term frequency stabili
Slide 12: Digital Rubidium Atomic Frequency Standard (DRAFS)
Digital Rubidium Atomic Frequency Standard (DRAFS) 2015 • Developed space qualified DRAFS • Compliance with GPS III space segment RAFS requirements • Successful completion of GPS-III CDR in 2015 • Successful completion of GPS-IIIF CDR in 2019 • Flight qualification complete • Demonstration scheduled
Slide 13: Voltage Controlled Crystal Oscillator (VCXO)
Voltage Controlled Crystal Oscillator (VCXO) 2020 • VCXO development and flight unit production under contract with L3Harris for GPSIIIF • The VCXO is used within the GPSIIIF MDU on the Navigation payload: – The VCXO provides the basic frequency reference for the navigation satellite – It provides a
Slide 14: POP Rubidium Vapor Atomic Clock
POP Rubidium Vapor Atomic Clock Current Development: production 2026 • Pulsed Optically Pumped Rb Stabilized Laser Package Rb Vapor Cell Clock (New Technology) (Existing Technology) (POP) Rubidium vapor atomic clock • Rb lamp replaced with single Laser SOA laser light source and filter cell removed
Slide 15: Mercury Ion Atomic Clock
Mercury Ion Atomic Clock Current Development: production 2027 • FEI is working with JPL to bring their Mercury Ion clock technology from the laboratory to production – Advanced clock technology – Enhanced long term stability from electromagnetically trapped ions – Compact, environmentally robust pac
Slide 16: Leveraging FEI's Technical Capabilities
Leveraging FEI’s Technical Capabilities The future • FEI’s existing technical capabilities, and proven ability to develop esoteric laboratory science demonstrations into reliable products is our key value proposition • NV diamond magnetometers • Rydberg Sensors • Clock ensembling • Advanced optical
Slide 17: FEI Targeted Sensor Technologies
FEI Targeted Sensor Technologies Remote Static Field Quantum Sensors: 2028 and beyond Collaboration with MIT Lincoln Laboratory 17
Slide 18: FEI Targeted Sensor Technologies
FEI Targeted Sensor Technologies Electromagnetic Field Quantum Sensors: 2028 and beyond • Very compact receiving antennas – Size of conventional antennas is determined by the signal wavelength – very large for low frequencies – Rydberg atom based antenna size is independent of the signal wavelength
Slide 19: Summary
Summary • FEI is a 64-year-old company, with a proven track record – strong and improving margins and cash generation – no debt – a capital allocation policy balancing R&D and returns in cash to shareholders • FEI currently provides precision time and frequency products for demanding applications –
Slide 20: FEI Contacts
FEI Contacts • www.freqelec.com • Contacts: – thomas.mcclelland@freqelec.com 516-794-4500 x2104 – Steven.bernstein@freqelec.com 516-794-4500 x2131 20