LGL LGL Group Inc

The LGL Group, Inc. (NYSE MKT: LGL) (the “Company” or “LGL”), announced its financial results for the full year and quarter ended December 31, 2017.

Summary of 2017 Full-Year Financial Results:

• Revenues of $22.4 million, up 7.2% compared to 2016
• Net income of $0.04 per share compared to a net income of $0.06 per share in 2016
• Order backlog improved 11.4% to $11.7 million at December 31, 2017 from $10.5 million at December 31, 2016
• Adjusted EBITDA was $0.36 per share, compared to $0.27 per share for 2016

Summary of Q4 2017 Financial Results:

• Revenues of $5.7 million, down (2.1%) compared to Q4 2016
• Net loss of ($0.01) per share compared to a net income of $0.08 per share in Q4 2016
• Adjusted EBITDA was $0.09 per share, compared to $0.12 per share for Q4 2016

Commenting on the Company’s 2017 results, Executive Chairman and CEO, Michael J. Ferrantino, Sr. stated, “I am very pleased to report to our shareholders our operating subsidiaries more than made up for the shortfall from hurricane Irma and are trending to a new normal. Revenue of $22.4 million, up 7.2% compared to 2016, is particularly significant since our internally developed metrics indicate our market grew by approximately 3%. Net income was $0.04 per share compared to $0.06 per share in 2016, but the decrease is not an operational issue, it is due in part to an increase in tax expense, related to the reversal of a valuation allowance in 2016, and an impairment of a note receivable of $102,000, related to an asset sale in 2013. Our backlog improved 11.4% to $11.7 million at year end up from $ 10.5 million in 2016. This is the metric we pay particular attention to. We strive for a book to bill of greater than one. This new business is attributed to our move to value-added assemblies which are less competitive and that provide engineered solutions to our customers.”

In closing, Mr. Ferrantino added, “We enter 2018 with a seasoned group of associates, our backlog is solid, our new order funnel is growing, and our capacity to handle an increase in business with small capital investment exists, so yes, I believe we are moving to a new normal. Finally, I want to thank all our employees, customers and shareholders for their hard work, commitment to giving us business and standing by us. I am both humbled and grateful for the success of our rights offering completed in the fall, which was oversubscribed and raised net cash of approximately $10.8 million. Although we are continuing to evaluate the best use of your investment, I can report we are being extremely judicious in our pursuit to increase shareholder value.”

About The LGL Group, Inc.

The LGL Group, Inc., through its two principal subsidiaries MtronPTI and PTF, designs, manufactures and markets highly-engineered electronic components used to control the frequency or timing of signals in electronic circuits, and designs high performance frequency and time reference standards that form the basis for timing and synchronization in various applications.

Headquartered in Orlando, Florida, the Company has additional design and manufacturing facilities in Yankton, South Dakota, Wakefield, Massachusetts and Noida, India, with local sales offices in Hong Kong, Sacramento, California and Austin, Texas.

For more information on the Company and its products and services, contact James Tivy at The LGL Group, Inc., 2525 Shader Rd., Orlando, Florida 32804, (407) 298-2000, or visit www.lglgroup.com and www.mtronpti.com.

Caution Concerning Forward Looking Statements

This press release may contain forward-looking statements made in reliance upon the safe harbor provisions of Section 27A of the Securities Act of 1933, as amended, and Section 21 E of the Securities Exchange Act of 1934, as amended. Forward-looking statements include all statements that do not relate solely to historical or current facts, and can be identified by the use of words such as “may,” “will,” “expect,” “project,” “estimate,” “anticipate,” “plan,” “believe,” “potential,” “should,” “continue” or the negative versions of those words or other comparable words. These forward-looking statements are not guarantees of future actions or performance. These forward-looking statements are based on information currently available to us and our current plans or expectations, and are subject to a number of uncertainties and risks that could significantly affect current plans, anticipated actions and our future financial condition and results. Certain of these risks and uncertainties are described in greater detail in our filings with the Securities and Exchange Commission. We are under no obligation to (and expressly disclaim any such obligation to) update or alter our forward-looking statements, whether as a result of new information, future events or otherwise.

   

THE LGL GROUP, INC.

Consolidated Statements of Operations

(Dollars in Thousands, Except Shares and Per Share Amounts)

  For the year ended December 31, 2017 2016 (audited) REVENUES $ 22,402 $ 20,891 Costs and expenses: Manufacturing cost of sales 14,661 13,858 Engineering, selling and administrative   7,465   7,194 OPERATING INCOME (LOSS) 276 (161 ) Total other (expense) income, net   (57 )   144 INCOME (LOSS) BEFORE INCOME TAXES 219 (17 ) Income tax (provision ) benefit   (102 )   165 NET INCOME $ 117 $ 148   Weighted average number of shares used in basic EPS calculation   2,929,641   2,665,043 Weighted average number of shares used in diluted EPS calculation   3,035,104   2,665,730 BASIC AND DILUTED NET INCOME PER COMMON SHARE $ 0.04 $ 0.06   For the quarter ended December 31, 2017 2016 (audited) REVENUES $ 5,657 $ 5,776 Costs and expenses: Manufacturing cost of sales 3,598 3,789 Engineering, selling and administrative   1,936   1,984 OPERATING INCOME 123 3 Total other (expense) income, net   (82 )   59 INCOME BEFORE INCOME TAXES 41 62 Income tax (provision ) benefit   (72 )   164 NET (LOSS) INCOME $ (31 ) $ 226   Weighted average number of shares used in basic EPS calculation   3,681,118   2,664,123 Weighted average number of shares used in diluted EPS calculation   3,790,812   2,672,549 BASIC AND DILUTED NET (LOSS) INCOME PER COMMON SHARE $ (0.01 ) $ 0.08        

THE LGL GROUP, INC.

Consolidated Balance Sheets

(Dollars in Thousands)

  December 31, 2017 December 31, 2016 (audited) ASSETS Cash and cash equivalents $ 13,250 $ 2,778 Marketable securities 3,803 2,770 Accounts receivable, net 3,393 3,504 Inventories, net 3,875 3,638 Prepaid expenses and other current assets   229   200 Total Current Assets 24,550 12,890 Property, plant, and equipment, net 2,179 2,711 Intangible assets, net 552 628 Deferred income taxes, net 173 214 Other assets, net   101   203 Total Assets $ 27,555 $ 16,646 LIABILITIES AND STOCKHOLDERS' EQUITY Total Current Liabilities 2,627 2,755 Total Stockholders' Equity   24,928   13,891 Total Liabilities and Stockholders' Equity $ 27,555 $ 16,646  

Reconciliations of GAAP to Non-GAAP Measures

To supplement our consolidated financial statements presented on a GAAP (generally accepted accounting principles) basis, the Company uses certain non-GAAP measures, including Adjusted EBITDA, which we define as net income (loss) adjusted to exclude depreciation and amortization expense, interest income (expense), provision (benefit) for income taxes, stock-based compensation expense and other items we believe are discrete events which have a significant impact on comparable GAAP measures and could distort an evaluation of our normal operating performance. These adjustments to our GAAP results are made with the intent of providing both management and investors a more complete understanding of the underlying operational results and trends and our marketplace performance. The presentation of this additional information is not meant to be considered in isolation or as a substitute for net earnings or diluted earnings per share prepared in accordance with generally accepted accounting principles in the United States.

Reconciliation of GAAP Income (Loss) Before Income Taxes to Non-GAAP Adjusted EBITDA:

      For the period ended December 31, 2017 (in 000's, except shares and per share amounts) Three Months Twelve Months Net income before income taxes $ 41 $ 219 Interest (income) expense (6 ) 11 Depreciation and amortization 122 642 Non-cash stock compensation 66 88 Impairment of note receivable 102 102 Gain on sale of marketable securities   —   (21 ) Adjusted EBITDA $ 325 $ 1,041 Basic per share information: Weighted average shares outstanding   3,681,118   2,929,641 Adjusted EBITDA per share $ 0.09 $ 0.36 Diluted per share information: Weighted average shares outstanding   3,790,812   3,035,104 Adjusted EBITDA per share $ 0.09 $ 0.34   For the period ended December 31, 2016 (in 000's, except shares and per share amounts) Three Months Twelve Months Net income (loss) before income taxes $ 62 $ (17 ) Interest expense 2 22 Depreciation and amortization 185 772 Non-cash stock compensation 71 67 Gain on disposal of assets — (110 ) Bargain purchase gain   —   (4 ) Adjusted EBITDA $ 320 $ 730 Basic per share information: Weighted average shares outstanding   2,664,123   2,665,043 Adjusted EBITDA per share $ 0.12 $ 0.27 Diluted per share information: Weighted average shares outstanding   2,672,549   2,665,730 Adjusted EBITDA per share $ 0.12 $ 0.27  

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The LGL Group, Inc.James Tivy, 407-298-2000jtivy@lglgroup.com