The LGL Group, Inc. (NYSE: LGL) (the “Company” or “LGL”),
announced its financial results for the three and six months ended
June 30, 2021.
- Revenues of $6.9 million compared to Q2 2020 revenues of $7.1
million
- Operating income of $0.6 million versus $0.2 million for the
prior year quarterly period
- Diluted net income per share of zero compared to $0.05 per
share for the prior year quarter
- Adjusted EBITDA was $0.8 million compared to $0.3 million for
Q2 2020
- Backlog was $21.3 million versus $19.8 million at December 31,
2020 and $22.5 million at June 30, 2020
The Company’s President and Chief Executive Officer, Mike
Ferrantino, said, “I am optimistic as our markets have started to
show improvement and we are beginning to benefit from our strategic
and operational initiatives.”
Bill Drafts, President and Chief Executive Officer of LGL’s main
operating unit, MtronPTI, stated, “While the avionics market
continued to impact our results, we continue to grow our space
business and delivered our first integrated microwave assembly to a
top tier defense firm, gaining market share and broadening our
technical capabilities and product offering.”
FINANCIAL RESULTS REVIEW
Revenues were $6.9 million versus $7.1 million for the second
quarter of 2020, 2.5% below prior year. The decline in shipments to
the avionics market was mostly offset by strong space business
performance. The backlog was $21.3 million versus $20.4 million
last quarter and $22.5 million for second quarter 2020. Quarterly
bookings of $7.8 million show sequential improvement, from $7.1
million last quarter and $5.8 million in the fourth quarter of
2020, but remain substantially below pre-COVID-19 levels.
Improvement in new avionics bookings started last quarter, but
deliveries are not being scheduled until early next year; quarterly
space market orders also trended upward during 2021.
Gross margins were 39.7% compared to 31.8% for the prior year
quarter benefiting from favorable product mix and cost reductions
including the elimination of certain previously required costs to
preserve manufacturing capabilities in response to the COVID-19
impacts on our business. The Company’s India operation was shut
down for five weeks during the second quarter of 2020.
Operating income of $0.6 million compared to $0.2 million for
the second quarter of 2020 reflecting the margin improvement.
Loss on equity investment of $0.7 million compared to $0.1
million in last year’s second quarter. The higher loss reflects the
impact of SPAC legal and other costs related to the planned third
quarter DFNS and IronNet business combination.
Diluted earnings per share of zero compared to $0.05 per share
in the second quarter of 2020. The second quarter increase in
equity loss from the aforementioned business combination related
costs ($0.6 million) offset the Company’s operating income for the
period. Weighted average shares outstanding at June 30, 2021 were
5.3 million versus 5.2 million at June 30, 2020.
Quarterly adjusted EBITDA, a non-GAAP measure, was $0.8 million
in the second quarter of 2021 versus $0.3 million in the second
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 $21.2 million and total working
capital of $28.4 million at June 30, 2021. The Company’s management
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 previously announced LGL Systems Acquisition Corp.
(NYSE-DFNS) business combination agreement with IronNet
Cybersecurity, Inc. and related private placement are expected to
close in the third quarter of 2021. A DFNS special meeting will be
held on August 26, 2021; at which time, approval of the business
combination transaction will be voted upon by shareholders.
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 21E 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
June 30,
2021
2020
REVENUES
$
6,882
$
7,059
Costs and expenses:
Manufacturing cost of sales
4,151
4,816
Engineering, selling and
administrative
2,115
2,059
OPERATING INCOME
616
184
Total other (expense) income, net
(609
)
128
INCOME BEFORE INCOME TAXES
7
312
Income tax expense
25
57
NET (LOSS) INCOME
$
(18
)
$
255
Weighted average number of shares used in
basic EPS calculation
5,272,204
5,211,773
BASIC NET (LOSS) INCOME PER COMMON
SHARE
$
0.00
$
0.05
Weighted average number of shares used in
diluted EPS calculation
5,272,204
5,245,162
DILUTED NET (LOSS) INCOME PER COMMON
SHARE
$
0.00
$
0.05
For the Six Months Ended June
30,
2021
2020
REVENUES
$
13,418
$
15,677
Costs and expenses:
Manufacturing cost of sales
8,552
10,478
Engineering, selling and
administrative
4,310
4,355
OPERATING INCOME
556
844
Total other (expense) income, net
(516
)
(295
)
INCOME BEFORE INCOME TAXES
40
549
Income tax expense
31
111
NET INCOME
$
9
$
438
Weighted average number of shares used in
basic EPS calculation
5,272,204
5,132,414
BASIC NET INCOME PER COMMON SHARE
$
0.00
$
0.09
Weighted average number of shares used in
diluted EPS calculation
5,337,986
5,170,740
DILUTED NET INCOME PER COMMON SHARE
$
0.00
$
0.08
THE LGL GROUP, INC.
Condensed Consolidated Balance
Sheets
(Unaudited)
(Dollars in Thousands)
June 30, 2021
December 31, 2020
ASSETS
Cash and cash equivalents
$
15,254
$
18,331
Marketable securities
5,993
5,791
Accounts receivable, net
4,654
4,122
Inventories, net
5,548
5,280
Prepaid expenses and other current
assets
270
257
Total Current Assets
31,719
33,781
Property, plant and equipment, net
2,952
2,785
Right-of-use lease assets
362
422
Equity investment in unconsolidated
subsidiary
5,045
3,072
Intangible assets, net
290
327
Deferred income taxes, net
2,996
3,052
Other assets
35
16
Total Assets
$
43,399
$
43,455
LIABILITIES AND STOCKHOLDERS'
EQUITY
Total Current Liabilities
3,282
3,397
Total Long-Term Liabilities
246
293
Total Liabilities
3,528
3,690
Total Stockholders' Equity
39,871
39,765
Total Liabilities and Stockholders'
Equity
$
43,399
$
43,455
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), income taxes
expense (benefit), 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
June 30,
2021
2020
(000's, except share and per share
amounts)
Income before income taxes
$
7
$
312
Interest expense, net
3
4
Depreciation and amortization
137
126
Non-cash stock compensation
19
37
Investment (income)
(75
)
(236
)
Loss on equity investment in
unconsolidated subsidiary
676
100
Adjusted EBITDA
$
767
$
343
Basic per share information:
Weighted average shares outstanding
5,272,204
5,211,773
Adjusted EBITDA per share
$
0.15
$
0.07
Diluted per share information:
Weighted average shares outstanding
5,272,204
5,245,162
Adjusted EBITDA per share
$
0.15
$
0.07
For the Six Months Ended June
30,
2021
2020
(000's, except shares and per share
amounts)
Income before income taxes
$
40
$
549
Interest expense, net
6
4
Depreciation and amortization
271
261
Non-cash stock compensation
97
47
Investment (income) loss
(202
)
57
Loss on equity investment in
unconsolidated subsidiary
752
139
Adjusted EBITDA
$
964
$
1,057
Basic per share information:
Weighted average shares outstanding
5,272,204
5,132,414
Adjusted EBITDA per share
$
0.18
$
0.21
Diluted per share information:
Weighted average shares outstanding
5,337,986
5,170,740
Adjusted EBITDA per share
$
0.18
$
0.20
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version on businesswire.com: https://www.businesswire.com/news/home/20210811005800/en/
James Tivy The LGL Group, Inc. jtivy@lglgroup.com (407)
298-2000
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