The LGL Group, Inc. (NYSE American: LGL) (the “Company” or
“LGL”), announced its financial results for the three and nine
months ended September 30, 2020.
- Revenues of $8.1 million declined (6.0%) compared to Q3 2019
revenues of $8.6 million
- Operating income was $0.7 million in Q3 2020 versus $1.1
million for the prior year period
- Diluted net income of $0.12 per share compared to $0.91 per
share ($0.24 per share excluding a $3.3 million tax benefit) for
the prior year quarter
- Order backlog was $21.5 million compared to $23.3 million at
September 30, 2019
- Adjusted EBITDA for Q3 2020 was $0.9 million compared to $1.3
million for Q3 2019
- Warrant dividend declared October 29, 2020 providing
shareholders’ efficient participation in future value.
The Company’s President and Chief Executive Officer, Ivan
Arteaga, said, “I commend the team for pulling together as we
worked through the spring COVID-19 shock, and ensuing summer
impacts. While demand from the avionics industry has contracted
significantly, the trajectory of the military/aerospace business is
strong and growing. Recent orders offer promise that we are getting
back to normal.”
Commenting on the Company’s Q3 2020 results, Bill Drafts,
President and Chief Executive Officer of LGL’s main operating unit,
MtronPTI, stated, “Our results improved sequentially
quarter-to-quarter as the overall business environment began to
stabilize and we could focus on the strategic actions previously
planned. I would like to thank the team for their dedication and
thank our customers for their continued business.”
THIRD QUARTER RESULTS – In 2020, LGL’s third quarter revenues
decreased $0.5 million, or 6.0%, to $8.1 million compared to $8.6
million for the corresponding quarter in 2019. Operating income
declined to $0.7 million reflecting lower sales than prior year,
although sales showed improvement over second quarter 2020 levels.
Product mix changes and costs related to the avionics production
work slowdown also contributed to the operating profit decline.
Adjusted EBITDA was $0.9 million in the third quarter of 2020
versus $1.3 million in the third quarter of 2019.
EARNINGS PER SHARE – Diluted earnings per share from ongoing
operations, during the third quarter were $0.12 per share in 2020
as compared to $0.91 per share in the third quarter of 2019. The
decrease was largely attributable to the $3.3 million tax benefit
in 2019 primarily due to release of the valuation allowance related
to the Company’s U.S. deferred tax assets and also from the
operating income impacts noted above. Weighted average shares
outstanding at September 30, 2020 were 5.3 million versus 5.0
million at September 30, 2019.
BALANCE SHEET – LGL’s balance sheet continued to improve in
2020. The balance sheet reflects a net cash position including
marketable securities of $22.9 million at September 30, 2020
compared to $18.1 million at December 31, 2019. The Company
continues to explore growth organically and through diversified
merger and acquisitions and believes the relationship with the SPAC
has enhanced its strategic profile in this context.
OPERATING STATISTICS – As of September 30, 2020, the Company’s
backlog decreased 7.9% to $21.5 million as compared to $23.3
million at September 30, 2019.
Our summary operating statistics are as follows:
Three months ended
September 30,
Change
(Amounts in millions, except
book:bill)
2020
2019
$
%
Bookings (Sales)
$
7,031
$
7,391
$
(360
)
(4.9
%)
Shipments (Revenues)
$
8,071
$
8,588
$
(517
)
(6.0
%)
Book:Bill
0.871
0.861
0.011
1.2
%
Backlog
$
21,456
$
23,285
$
(1,829
)
(7.9
%)
Nine months ended
September 30,
Change
(Amounts in millions, except
book:bill)
2020
2019
$
%
Bookings (Sales)
$
23,347
$
28,837
$
(5,490
)
(19.0
%)
Shipments (Revenues)
$
23,748
$
23,058
$
690
3.0
%
Book:Bill
0.983
1.251
(0.268
)
(21.4
%)
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 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.
Condensed Consolidated
Statements of Operations
(Unaudited)
(Dollars in Thousands, Except
Share and Per Share Amounts)
For the Three Months Ended
September 30,
2020
2019
REVENUES
$
8,071
$
8,588
Costs and expenses:
Manufacturing cost of sales
5,203
5,049
Engineering, selling and
administrative
2,159
2,417
OPERATING INCOME
709
1,122
Total other income (expense), net
91
82
INCOME BEFORE INCOME TAXES
800
1,204
Income tax expense (benefit)
171
(3,326
)
NET INCOME
$
629
$
4,530
Weighted average number of shares used in
basic EPS calculation
5,212,652
4,901,698
BASIC NET INCOME PER COMMON SHARE
$
0.12
$
0.92
Weighted average number of shares used in
diluted EPS calculation
5,251,078
4,965,808
DILUTED NET INCOME PER COMMON SHARE
$
0.12
$
0.91
For the Nine Months Ended
September 30,
2020
2019
REVENUES
$
23,748
$
23,058
Costs and expenses:
Manufacturing cost of sales
15,681
13,970
Engineering, selling and
administrative
6,514
6,676
OPERATING INCOME
1,553
2,412
Total other income (expense), net
(204
)
353
INCOME BEFORE INCOME TAXES
1,349
2,765
Income tax expense (benefit)
282
(3,286
)
NET INCOME
$
1,067
$
6,051
Weighted average number of shares used in
basic EPS calculation
5,159,452
4,872,461
BASIC NET INCOME PER COMMON SHARE
$
0.21
$
1.24
Weighted average number of shares used in
diluted EPS calculation
5,195,754
4,965,989
DILUTED NET INCOME PER COMMON SHARE
$
0.21
$
1.22
THE LGL GROUP, INC.
Condensed Consolidated Balance
Sheets
(Unaudited)
(Dollars in Thousands)
September 30, 2020
December 31, 2019
ASSETS
Cash and cash equivalents
$
17,276
$
12,453
Marketable securities
5,646
5,631
Accounts receivable, net
4,644
4,445
Inventories, net
5,430
6,016
Prepaid expenses and other current
assets
268
365
Total Current Assets
33,264
28,910
Property, plant, and equipment, net
2,824
2,831
Equity investment in unconsolidated
subsidiary
3,134
3,334
Deferred income taxes, net
3,046
3,307
Intangible assets, net
366
402
Right-of-use lease asset
452
331
Other assets
-
102
Total Assets
$
43,086
$
39,217
LIABILITIES AND STOCKHOLDERS' EQUITY
Total Current Liabilities
3,700
4,324
Total Stockholders' Equity
39,386
34,893
Total Liabilities and Stockholders'
Equity
$
43,086
$
39,217
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 adjusted to exclude depreciation and
amortization expense, interest income (expense), provision
(benefit) for income taxes, stock-based compensation expense,
investment income 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 Net Income Before Income Taxes to Non-GAAP Adjusted
EBITDA:
For the Three Months Ended
September 30,
2020
2019
(000's, except share and per share
amounts)
Net income before income taxes
$
800
$
1,204
Interest expense (income)
3
—
Depreciation and amortization
131
125
Non-cash stock compensation
57
5
Investment income
(124
)
(76
)
Loss on equity investment in
unconsolidated subsidiary
61
—
Adjusted EBITDA
$
928
$
1,258
Basic per share information:
Weighted average shares outstanding
5,212,652
4,901,698
Adjusted EBITDA per share
$
0.18
$
0.26
Diluted per share information:
Weighted average shares outstanding
5,251,078
4,965,808
Adjusted EBITDA per share
$
0.18
$
0.25
For the Nine Months Ended
September 30,
2020
2019
(000's, except shares and per share
amounts)
Net income before income taxes
$
1,349
$
2,765
Interest expense (income)
7
(1
)
Depreciation and amortization
392
365
Non-cash stock compensation
104
17
Investment income
(67
)
(346
)
Loss on equity investment in
unconsolidated subsidiary
200
—
Adjusted EBITDA
$
1,985
$
2,800
Basic per share information:
Weighted average shares outstanding
5,159,452
4,872,461
Adjusted EBITDA per share
$
0.38
$
0.57
Diluted per share information:
Weighted average shares outstanding
5,195,754
4,965,989
Adjusted EBITDA per share
$
0.38
$
0.56
View source
version on businesswire.com: https://www.businesswire.com/news/home/20201112005116/en/
James Tivy The LGL Group, Inc. jtivy@lglgroup.com (407)
298-2000
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