The LGL Group, Inc. (NYSE American: LGL) (the “Company” or
“LGL”), announced its financial results for the three months ended
March 31, 2021.
- Revenues of $6.5 million declined (24.2%) compared to Q1 2020
revenues of $8.6 million
- Operating loss of $60,000 versus income of $0.7 million for the
prior year period
- Diluted net income of $0.01 per share compared to $0.04 per
share for the prior year quarter
- Adjusted EBITDA for Q1 2021 was $0.2 million compared to $0.7
million for Q1 2020
- Backlog was $20.4 million versus $19.8 million at December 31,
2020 and $22.6 million at March 31, 2020
The Company’s President and Chief Executive Officer, Mike
Ferrantino, said, “Although we continue to feel the effects of
COVID-19 on our businesses, the prospects for LGL are strong and I
am privileged to have the opportunity to begin leading LGL this
month, an exciting time from both an investment and operating
prospective.”
Commenting on the Company’s Q1 2021 results, Bill Drafts,
President and Chief Executive Officer of LGL’s main operating unit,
MtronPTI, stated, “We are committed to streamlining our operations
and implementing high-payback capital improvements as we manage the
impact of COVID-19 on our customers, suppliers and employees. We
are confident MtronPTI will emerge a stronger, more efficient
company as business conditions improve.”
Financial Results Review
Revenues were $6.5 million versus $8.6 million for the first
quarter of 2020, a decrease of $2.1 million, or 24.2%. Revenues
were significantly impacted by the decline in the avionics market
and the delay of orders from certain customers experiencing
semiconductor component shortages. The comparison also reflects the
pre-COVID-19 conditions in all markets during the first quarter of
2020. The backlog was $20.4 million versus $19.8 million last
quarter and $22.6 million for first quarter 2020. Quarterly
bookings have been improving sequentially over the last few
quarters but remain substantially below pre-COVID-19 levels.
Improvement in new avionics bookings started this quarter, but
deliveries are not being scheduled until early next year.
Gross margins were 32.7% compared to 34.3% for the prior year
quarter. Gross margins were impacted by the temporary onshoring of
production to our U.S. factories after last year’s COVID-19
shutdown of India and lower avionics volume at our Yankton plant,
resulting in increased production costs. Cost saving measures have
been taken, but certain costs continue to be incurred to preserve
manufacturing capabilities in both our India and Yankton
plants.
Operating loss was $60,000 compared to income of $0.7 million
for the first quarter of 2020 largely reflecting the reduced
revenue and, to a lesser degree, lower margins.
Diluted earnings per share were $0.01 per share compared to
$0.04 per share in the first quarter of 2020. Weighted average
shares outstanding at March 31, 2021 were 5.4 million versus 5.1
million at March 31, 2020.
Quarterly adjusted EBITDA, a non-GAAP measure, was $0.2 million
in the first quarter of 2021 versus $0.7 million in the first
quarter of 2020. (See GAAP reconciliation in the Appendix.)
Balance Sheet
The Company’s strong balance sheet reflects a net cash position
including marketable securities of $24.6 million at March 31, 2021
compared to $24.1 million at December 31, 2020. 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.
The Company’s investment in the Sponsor of the SPAC, LGL Systems
Acquisition Corp. (NYSE-DFNS), is expected to realize value for
shareholders. In March 2021, DFNS announced it signed a business
combination agreement with IronNet Cybersecurity, Inc. (“IronNet”),
an innovative leader transforming cybersecurity through Collective
Defense. The combined company will be renamed “IronNet
Cybersecurity, Inc.” and will be listed on the NYSE American and
trade under the ticker symbol “IRNT”. The Company subscribed to a
$2.7 million investment into the Sponsor in March 2021 which it
funded in May. The investment will be part of the Sponsor
syndication of $5.66 million organized to participate in a $125
million private placement (“PIPE”) purchase of 12,500.000 shares of
DFNS Class A common stock.
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
March 31,
2021
2020
REVENUES
$
6,536
$
8,618
Costs and expenses:
Manufacturing cost of sales
4,401
5,662
Engineering, selling and
administrative
2,195
2,296
OPERATING (LOSS) INCOME
(60
)
660
Total other income (expense), net
93
(423
)
INCOME BEFORE INCOME TAXES
33
237
Income tax expense
6
54
NET INCOME
$
27
$
183
Weighted average number of shares used in
basic EPS calculation
5,272,204
5,052,184
BASIC NET INCOME PER COMMON SHARE
$
0.01
$
0.04
Weighted average number of shares used in
diluted EPS calculation
5,350,571
5,097,879
DILUTED NET INCOME PER COMMON SHARE
$
0.01
$
0.04
THE LGL GROUP, INC.
Condensed Consolidated Balance
Sheets
(Unaudited)
(Dollars in Thousands)
March 31, 2021
December 31, 2020
ASSETS
Cash and cash equivalents
$
18,678
$
18,331
Marketable securities
5,918
5,791
Accounts receivable, net
3,913
4,122
Inventories, net
5,339
5,280
Prepaid expenses and other current
assets
365
257
Total Current Assets
34,213
33,781
Property, plant, and equipment, net
2,725
2,785
Right-of-use lease assets
396
422
Equity investment in unconsolidated
subsidiary
5,721
*
3,072
Intangible assets, net
308
327
Deferred income taxes, net
3,023
3,052
Other assets
64
16
Total Assets
$
46,450
$
43,455
LIABILITIES AND STOCKHOLDERS'
EQUITY
Total Current Liabilities
6,308
*
3,397
Total Long-Term Liabilities
272
293
Total Liabilities
6,580
3,690
Total Stockholders' Equity
39,870
39,765
Total Liabilities and Stockholders'
Equity
$
46,450
$
43,455
* Includes $2.7 million subscription
agreement with Sponsor for PIPE
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
March 31,
2021
2020
(000's, except share and per share
amounts)
Net income before income taxes
$
33
$
237
Interest expense, net
3
—
Depreciation and amortization
134
135
Non-cash stock compensation
78
10
Investment (income) loss
(127
)
293
Loss on equity investment in
unconsolidated subsidiary
76
39
Adjusted EBITDA
$
197
$
714
Basic per share information:
Weighted average shares outstanding
5,272,204
5,052,184
Adjusted EBITDA per share
$
0.04
$
0.14
Diluted per share information:
Weighted average shares outstanding
5,350,571
5,097,879
Adjusted EBITDA per share
$
0.04
$
0.14
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version on businesswire.com: https://www.businesswire.com/news/home/20210512005908/en/
James Tivy The LGL Group, Inc. jtivy@lglgroup.com (407)
298-2000
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