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Table of Contents



 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549


FORM 10-Q

 

(Mark One)

         QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2024

 

OR

 

         TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ____________ to ____________

 


Commission File No. 001-00106


 

logo.jpg

The LGL Group, Inc.

(Exact Name of Registrant as Specified in Its Charter)


Delaware

38-1799862

(State or Other Jurisdiction of Incorporation or Organization)

(I.R.S. Employer Identification No.)

  

2525 Shader Rd., Orlando, Florida

32804

(Address of principal executive offices)

(Zip Code)

 

(Registrants telephone number, including area code): (407) 298-2000

 

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class

 

Trading Symbol(s)

 

Name of each exchange on which registered

Common Stock, par value $0.01

 

LGL

 

NYSE American

Warrants to Purchase Common Stock, par value $0.01 LGL WS NYSE American

 

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes  ☒    No  ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes  ☒    No  ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer

Accelerated filer

Non-accelerated filer

Smaller reporting company

Emerging growth company

  

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes      No  ☒

As of July 31, 2024, the registrant had 5,373,055 shares of common stock, $0.01 par value per share, outstanding.

 



 

 

The LGL Group, Inc.

Form 10-Q for the Period Ended June 30, 2024

Table of Contents

 

           

Page

PART I.

 

FINANCIAL INFORMATION

   
             

Item 1.

 

Financial Statements (Unaudited)

   
   

Condensed Consolidated Balance Sheets

 

2

   

Condensed Consolidated Statements of Operations

 

3

   

Condensed Consolidated Statements of Stockholders’ Equity

 

4

   

Condensed Consolidated Statements of Cash Flows

 

6

   

Notes to the Condensed Consolidated Financial Statements

 

 

      1. Basis of Presentation   7
      2. Summary of Significant Accounting Policies   7
      3. Segment Information   8
      4. Investments   11
      5. Fair Value Measurements   12
      6. Variable Interest Entities   13
      7. Related Party Transactions   14
      8. Income Taxes   15
      9. Stock-Based Compensation   15
      10. Stockholders' Equity   16
      11. Earnings Per Share   16
      12. Contingencies   17
      13. Other Financial Statement Information   17
      14. Domestic and Foreign Revenues   17
      15. Subsequent Events   17
             

Item 2.

 

Management’s Discussion and Analysis of Financial Condition and Results of Operations

 

18

Item 3.

 

Quantitative and Qualitative Disclosures About Market Risk

 

25

Item 4.

 

Controls and Procedures

 

25

             

PART II.

 

OTHER INFORMATION

   
             

Item 1.

 

Legal Proceedings

 

26

Item 1A.   Risk Factors   26

Item 5.

 

Other Information

 

26

Item 6.

 

Exhibits

 

26

         

 

  Signatures  

28

 

 

Cautionary Statement Concerning Forward-Looking Statements

 

 

Certain statements contained in this Quarterly Report on Form 10-Q of The LGL Group, Inc. ("LGL Group" or the "Company") and the Company's other communications and statements, other than historical facts, may be considered forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). The Company intends for all such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in Section 27A of the Securities Act and Section 21E of the Exchange Act, as applicable by law. Such statements include, in particular, statements about the Company's beliefs, plans, objectives, goals, expectations, estimates, projections and intentions. These statements are subject to significant risks and uncertainties and are subject to change based on various factors, many of which are beyond the Company's control. The words "may," "could," "should," "would," "believe," "anticipate," "estimate," "expect," "intend," "plan," "target," "goal" and similar expressions are intended to identify forward-looking statements. All forward-looking statements, by their nature, are subject to risks and uncertainties. Therefore, such statements are not intended to be a guarantee of the Company's performance in future periods. The Company's actual future results may differ materially from those set forth in the Company's forward-looking statements. For information concerning these factors and related matters, see "Risk Factors" in Part I, Item 1A of our Annual Report on Form 10-K for the fiscal year ended December 31, 2023, filed with the Securities and Exchange Commission ("SEC") on April 1, 2024, this Quarterly Report on Form 10-Q and our other filings with the SEC. However, other factors besides those referenced could adversely affect the Company's results, and you should not consider any such list of factors to be a complete set of all potential risks or uncertainties. Any forward-looking statements made by the Company herein speak as of the date of this Quarterly Report on Form 10-Q. The Company does not undertake to update any forward-looking statement, except as required by law. As a result, you should not place undue reliance on these forward-looking statements.

 

 

 

 

PART I

 

FINANCIAL INFORMATION

 

Item 1.

Financial Statements

 

The LGL Group, Inc.

Condensed Consolidated Balance Sheets

(Unaudited)

 

(in thousands, except share data)

 

June 30, 2024

 

December 31, 2023

Assets:

        

Current assets:

        

Cash and cash equivalents

 $41,074  $40,711 

Marketable securities

  18   22 

Accounts receivable, net of reserves of $52 and $58, respectively

  339   356 

Inventories, net

  336   204 

Prepaid expenses and other current assets

  236   273 

Total current assets

  42,003   41,566 

Right-of-use lease assets

  41   75 

Intangible assets, net

  46   57 

Deferred income tax assets

  157   152 

Total assets

 $42,247  $41,850 
         

Liabilities:

        

Current liabilities:

        

Accounts payable

  223   93 

Accrued compensation and commissions

  219   264 

Income taxes payable

  73   41 

Other accrued expenses

  106   76 

Total current liabilities

  621   474 

Other liabilities

  722   694 

Total liabilities

  1,343   1,168 
         

Contingencies (Note 12)

          
         

Stockholders' equity:

        

Common stock ($0.01 par value; 30,000,000 shares authorized; 5,454,639 shares issued and 5,373,055 shares outstanding as of June 30, 2024 and December 31, 2023)

  53   53 

Treasury stock, at cost (81,584 shares as of June 30, 2024 and December 31, 2023)

  (580)  (580)

Additional paid-in capital

  46,367   46,349 

Accumulated deficit

  (6,902)  (7,060)

Total LGL Group stockholders' equity

  38,938   38,762 

Non-controlling interests

  1,966   1,920 

Total stockholders' equity

  40,904   40,682 

Total liabilities and stockholders' equity

 $42,247  $41,850 

 

See accompanying Notes to the Condensed Consolidated Financial Statements.

 

 

 

The LGL Group, Inc.

Condensed Consolidated Statements of Operations

(Unaudited)

 

   

Three Months Ended June 30,

 

Six Months Ended June 30,

(in thousands, except share data)

 

2024

 

2023

 

2024

 

2023

Revenues:

                               

Net sales

  $ 531     $ 403     $ 923     $ 844  

Net investment income

    538       275       1,037       473  

Net (losses) gains

    (1 )     43       (4 )     388  

Total revenues

    1,068       721       1,956       1,705  

Expenses:

                               

Manufacturing cost of sales

    214       208       418       400  

Engineering, selling and administrative

    617       645       1,222       1,187  

Total expenses

    831       853       1,640       1,587  

Income (loss) from continuing operations before income taxes

    237       (132 )     316       118  

Income tax (benefit) expense

    76       (2 )     112       63  

Net income (loss) from continuing operations

    161       (130 )     204       55  

Income (loss) from discontinued operations, net of tax

                      (28 )

Net income (loss)

    161       (130 )     204       27  

Less: Net income attributable to non-controlling interests

    24             46        

Net income (loss) attributable to LGL Group common stockholders

  $ 137     $ (130 )   $ 158     $ 27  
                                 

Income (loss) per common share attributable to LGL Group common stockholders:

                               

Basic (a):

                               

Income (loss) from continuing operations

  $ 0.03     $ (0.02 )   $ 0.03     $ 0.01  

Income (loss) from discontinued operations

                      (0.01 )

Net income (loss) attributable to LGL Group common stockholders

  $ 0.03     $ (0.02 )   $ 0.03     $ 0.01  
                                 

Diluted (a):

                               

Income (loss) from continuing operations

  $ 0.02     $ (0.02 )   $ 0.03     $ 0.01  

Income (loss) from discontinued operations

                      (0.01 )

Net income (loss) attributable to LGL Group common stockholders

  $ 0.02     $ (0.02 )   $ 0.03     $ 0.01  
                                 

Weighted average shares outstanding:

                               

Basic

    5,352,937       5,352,937       5,352,937       5,352,937  

Diluted

    5,482,543       5,352,937       5,548,869       5,352,937  

(a)

Basic and diluted earnings per share are calculated using actual, unrounded amounts. Therefore, the components of earnings per share may not sum to its corresponding total.

 

See accompanying Notes to the Condensed Consolidated Financial Statements.

 

 

The LGL Group, Inc.

Condensed Consolidated Statements of Stockholders Equity

(Unaudited)

 

(in thousands)

 

Common Stock

 

Treasury Stock

 

Additional Paid-In Capital

 

Accumulated Deficit

 

Total LGL Stockholders' Equity

 

Non-Controlling Interests

 

Total Equity

Balance at March 31, 2024

  $ 53     $ (580 )   $ 46,358     $ (7,039 )   $ 38,792     $ 1,942     $ 40,734  

Net income attributable to LGL Group or non-controlling interests

                      137       137       24       161  

Stock-based compensation

                9             9             9  

Consolidation of non-controlling interests

                                         

Balance at June 30, 2024

  $ 53     $ (580 )   $ 46,367     $ (6,902 )   $ 38,938     $ 1,966     $ 40,904  

 

 

(in thousands)

 

Common Stock

 

Treasury Stock

 

Additional Paid-In Capital

 

Accumulated Deficit

 

Total LGL Stockholders' Equity

 

Non-Controlling Interests

 

Total Equity

Balance at March 31, 2023

  $ 53     $ (580 )   $ 46,346     $ (7,172 )   $ 38,647     $     $ 38,647  

Net loss attributable to LGL Group or non-controlling interests

                      (130 )     (130 )           (130 )

Stock-based compensation

                                         

Consolidation of non-controlling interests

                                  1,872       1,872  

Balance at June 30, 2023

  $ 53     $ (580 )   $ 46,346     $ (7,302 )   $ 38,517     $ 1,872     $ 40,389  

 

See accompanying Notes to the Condensed Consolidated Financial Statements.

 

 

 

The LGL Group, Inc.

Condensed Consolidated Statements of Stockholders Equity

(Unaudited)

 

(in thousands)

 

Common Stock

 

Treasury Stock

 

Additional Paid-In Capital

 

Accumulated Deficit

 

Total LGL Stockholders' Equity

 

Non-Controlling Interests

 

Total Equity

Balance at December 31, 2023

  $ 53     $ (580 )   $ 46,349     $ (7,060 )   $ 38,762     $ 1,920     $ 40,682  

Net income attributable to LGL Group or non-controlling interests

                      158       158       46       204  

Stock-based compensation

                18             18             18  

Consolidation of non-controlling interests

                                         

Balance at June 30, 2024

  $ 53     $ (580 )   $ 46,367     $ (6,902 )   $ 38,938     $ 1,966     $ 40,904  

 

 

(in thousands)

 

Common Stock

 

Treasury Stock

 

Additional Paid-In Capital

 

Accumulated Deficit

 

Total LGL Stockholders' Equity

 

Non-Controlling Interests

 

Total Equity

Balance at December 31, 2022

  $ 53     $ (580 )   $ 46,346     $ (7,329 )   $ 38,490     $     $ 38,490  

Net income attributable to LGL Group or non-controlling interests

                      27       27             27  

Stock-based compensation

                                         

Consolidation of non-controlling interests

                                  1,872       1,872  

Balance at June 30, 2023

  $ 53     $ (580 )   $ 46,346     $ (7,302 )   $ 38,517     $ 1,872     $ 40,389  

 

See accompanying Notes to the Condensed Consolidated Financial Statements.

 

 

 

The LGL Group, Inc.

Condensed Consolidated Statements of Cash Flows

(Unaudited)

 

   

Six Months Ended June 30,

(in thousands, except share data)

 

2024

 

2023

Cash flows from operating activities:

               

Net income

  $ 204     $ 27  

Adjustments to reconcile net income to net cash provided by (used in) operating activities:

               

Noncash revenues, expenses, gains and losses included in income:

               

Depreciation

          1  

Amortization of finite-lived intangible assets

    11       6  

Stock-based compensation

    18        

Realized loss on sale of marketable securities

          4,316  

Unrealized loss (gain) on marketable securities

    4       (4,704 )

Deferred income taxes

    17       18  

Changes in operating assets and liabilities:

               

Decrease in accounts receivable, net

    17       170  

(Increase) decrease in inventories, net

    (132 )     39  

Decrease in prepaid expenses and other assets

    37       185  

Decrease (increase) in accounts payable, accrued compensation, income taxes and commissions and other

    187       (67 )

Total adjustments

    159       (36 )

Net cash provided by (used in) operating activities

    363       (9 )

Cash flows from investing activities:

               

Cash from consolidation of LGL Systems

          1,869  

Proceeds from sale of marketable securities

          16,947  

Net cash provided by investing activities

          18,816  

Increase in cash and cash equivalents

    363       18,807  

Cash and cash equivalents at beginning of period

    40,711       21,507  

Cash and cash equivalents at end of period

  $ 41,074     $ 40,314  
                 

Supplemental Disclosure:

               

Income taxes paid

  $ 76     $ 134  

 

See accompanying Notes to the Condensed Consolidated Financial Statements.

 

 
6

The LGL Group, Inc.
Notes to the Condensed Consolidated Financial Statements (Unaudited)
(Dollar amounts in thousands, unless otherwise stated)

 

1. Basis of Presentation

 

The LGL Group, Inc. is a holding company engaged in services, merchant investment, and manufacturing business activities. The Company was incorporated in 1928 under the laws of the State of Indiana and reincorporated under the laws of the State of Delaware in 2007. Unless the context indicates otherwise, the terms "LGL," "LGL Group," "we," "us," "our," or the "Company" mean The LGL Group, Inc. and its consolidated subsidiaries.

 

The Company’s manufacturing business is operated through its subsidiary Precise Time and Frequency, LLC ("PTF"), which has operations in Wakefield, Massachusetts. PTF is engaged in the design of high-performance Frequency and Time Reference Standards that form the basis for timing and synchronization in various applications.

 

These unaudited Condensed Consolidated Financial Statements do not include all disclosures that are normally included in annual financial statements prepared in accordance with accounting principles generally accepted in the United States ("U.S. GAAP") and should be read in conjunction with the audited Consolidated Financial Statements and the related notes included in our Annual Report on Form 10-K for the year ended  December 31, 2023 (the "2023 Annual Report") filed with the Securities and Exchange Commission (the "SEC") on April 1, 2024. The consolidated financial information as of  December 31, 2023 included herein has been derived from the audited Consolidated Financial Statements in the 2023 Annual Report

 

The Condensed Consolidated Financial Statements include the accounts of The LGL Group, Inc., its majority-owned subsidiaries, and variable interest entities ("VIEs") of which we are the primary beneficiary.

 

In the opinion of management, these Condensed Consolidated Financial Statements contain all adjustments (consisting of normal recurring adjustments, including eliminations of material intercompany accounts and transactions) considered necessary for a fair statement of the results presented herein. Operating results for the three and six months ended  June 30, 2024 are not necessarily indicative of the results that may be expected for the full year ending December 31, 2024.

 

 

2. Summary of Significant Accounting Policies

 

During the three and six months ended June 30, 2024, there were no material changes to our significant accounting policies included in the  2023 Annual Report.  For additional information, refer to Note 2 to the audited Consolidated Financial Statements in the 2023  Annual Report.

 

Use of Estimates

 

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates.

 

Impairment of Long-Lived Assets

 

Long-lived assets, including intangible assets subject to amortization, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of the asset may not be recoverable. Long-lived assets are grouped with other assets to the lowest level to which identifiable cash flows are largely independent of the cash flows of other groups of assets and liabilities. Management assesses the recoverability of the carrying cost of the assets based on a review of projected undiscounted cash flows. If an asset is held for sale, management reviews its estimated fair value less cost to sell. Fair value is determined using pertinent market information, including appraisals or broker's estimates, and/or projected discounted cash flows. In the event an impairment loss is identified, it is recognized based on the amount by which the carrying value exceeds the estimated fair value of the long-lived asset.

 

We performed an assessment to determine if there were any indicators of impairment as a result of the operating conditions resulting as of the periods ended  June 30, 2024 and December 31, 2023. We concluded that, while there were events and circumstances in the macro-environment that did impact us, we did not experience any entity-specific indicators of asset impairment and no triggering events occurred.

 

 

7

The LGL Group, Inc.
Notes to the Condensed Consolidated Financial Statements (Unaudited)
(Dollar amounts in thousands, unless otherwise stated)

 

Future Application of Accounting Standards

 

Segment Reporting

In November 2023, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2023-07, "Segment Reporting (Topic 280) - Improvements to Reportable Segment Disclosures" ("ASU 2023-07"), to address improvements to reportable segment disclosures. The standard primarily requires the following disclosure on an annual and interim basis: (i) significant segment expenses that are regularly provided to chief operating decision maker ("CODM") and included within each reported measure of segment profit or loss; and (ii) other segment items and description of its composition. The standard also requires current annual disclosures about a reportable segment's profits or losses and assets to be disclosed in interim periods and the title and position of the CODM with an explanation of how the CODM uses the report measure(s) of segment profits or losses in assessing segment performance. The provisions of the standard are effective for public companies for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024, with early adoption permitted. The standard is applied retrospectively to all prior periods presented. We are assessing the impact of this standard.

 

Income Taxes

In December 2023, the FASB issued ASU 2023-09, "Income Taxes (Topic 740) - Improvements to Income Tax Disclosures" ("ASU 2023-09"). The standard requires disaggregated information about a company's effective tax rate reconciliation as well as information on income taxes paid. The provisions of the standard are effective for public companies for fiscal years beginning after December 15, 2024, with early adoption permitted. This standard applies prospectively; however, retrospective application is permitted. We are assessing the impact of this standard.

 

 

3. Segment Information

 

The Company has identified two reportable business segments: Electronic Instruments and Merchant Investment. These segments are consistent with the manner in which the chief operating decision maker reviews the business to assess performance and allocate resources. A brief description of each segment is below:

 

The Electronic Instruments segment includes all products manufactured and sold by PTF.

 

The Merchant Investment segment includes all activity produced by Lynch Capital International, LLC ("Lynch Capital").

 

The Company includes in Corporate the following corporate and business activities:

 

corporate level assets and financial obligations such as cash and cash equivalents invested in highly liquid U.S. Treasury money market funds and other marketable securities;

 

other items not allocated to or directly related to the Company's operating segments, including items such as deferred tax balances; and

 

intercompany eliminations.

 

The Electronic Instruments and Merchant Investment segments are allocated overhead expenses based on each segment's assets as percentage of total assets.

 

 

8

The LGL Group, Inc.
Notes to the Condensed Consolidated Financial Statements (Unaudited)
(Dollar amounts in thousands, unless otherwise stated)

 

The following tables presents LGL Group's operations by segment:

  

Three Months Ended June 30, 2024

  

Electronic Instruments

 

Merchant Investment

 

Corporate

 

Consolidated

Revenues:

                

Net sales

 $531  $  $  $531 

Net investment income

     315   223   538 

Net (losses) gains

        (1)  (1)

Total revenues

  531   315   222   1,068 

Expenses:

                

Manufacturing cost of sales

  214         214 

Engineering, selling and administrative

  243   78   296   617 

Total expenses

  457   78   296   831 

Income (loss) from continuing operations before income taxes

  74   237   (74)  237 

Income tax expense

        76   76 

Net income (loss) from continuing operations

  74   237   (150)  161 

Income (loss) from discontinued operations, net of tax

            

Net income (loss)

  74   237   (150)  161 

Less: Net income attributable to non-controlling interests

     24      24 

Net income (loss) attributable to LGL Group common stockholders

 $74  $213  $(150) $137 

 

  

Three Months Ended June 30, 2023

  

Electronic Instruments

 

Merchant Investment

 

Corporate

 

Consolidated

Revenues:

                

Net sales

 $403  $  $  $403 

Net investment income

        275   275 

Net (losses) gains

        43   43 

Total revenues

  403      318   721 

Expenses:

                

Manufacturing cost of sales

  208         208 

Engineering, selling and administrative

  173      472   645 

Total expenses

  381      472   853 

Income (loss) from continuing operations before income taxes

  22      (154)  (132)

Income tax expense (benefit)

        (2)  (2)

Net income (loss) from continuing operations

  22      (152)  (130)

Income (loss) from discontinued operations, net of tax

            

Net income (loss)

  22      (152)  (130)

Less: Net income attributable to non-controlling interests

            

Net income (loss) attributable to LGL Group common stockholders

 $22  $  $(152) $(130)

 

 

9

The LGL Group, Inc.
Notes to the Condensed Consolidated Financial Statements (Unaudited)
(Dollar amounts in thousands, unless otherwise stated)

 

  

Six Months Ended June 30, 2024

  

Electronic Instruments

 

Merchant Investment

 

Corporate

 

Consolidated

Revenues:

                

Net sales

 $923  $  $  $923 

Net investment income

     604   433   1,037 

Net (losses) gains

        (4)  (4)

Total revenues

  923   604   429   1,956 

Expenses:

                

Manufacturing cost of sales

  418         418 

Engineering, selling and administrative

  429   127   666   1,222 

Total expenses

  847   127   666   1,640 

Income (loss) from continuing operations before income taxes

  76   477   (237)  316 

Income tax expense

        112   112 

Net income (loss) from continuing operations

  76   477   (349)  204 

Income (loss) from discontinued operations, net of tax

            

Net income (loss)

  76   477   (349)  204 

Less: Net income attributable to non-controlling interests

     46      46 

Net income (loss) attributable to LGL Group common stockholders

 $76  $431  $(349) $158 

 

  

Six Months Ended June 30, 2023

  

Electronic Instruments

 

Merchant Investment

 

Corporate

 

Consolidated

Revenues:

                

Net sales

 $844  $  $  $844 

Net investment income

        473   473 

Net (losses) gains

        388   388 

Total revenues

  844      861   1,705 

Expenses:

                

Manufacturing cost of sales

  400         400 

Engineering, selling and administrative

  350      837   1,187 

Total expenses

  750      837   1,587 

Income (loss) from continuing operations before income taxes

  94      24   118 

Income tax expense

        63   63 

Net income (loss) from continuing operations

  94      (39)  55 

Income (loss) from discontinued operations, net of tax

        (28)  (28)

Net income (loss)

  94      (67)  27 

Less: Net income attributable to non-controlling interests

            

Net income (loss) attributable to LGL Group common stockholders

 $94  $  $(67) $27 

 

The following table presents LGL Group's identifiable assets by segment:

  

June 30, 2024

 

December 31, 2023

Electronic Instruments

 $835  $843 

Merchant Investment

  24,134   23,530 

Corporate

  17,278   17,477 

Total

 $42,247  $41,850 

 

The Company did not have any capital expenditures as of  June 30, 2024 or  December 31, 2023.

 

 

 

10

The LGL Group, Inc.
Notes to the Condensed Consolidated Financial Statements (Unaudited)
(Dollar amounts in thousands, unless otherwise stated)

 

4. Investments

 

Marketable Securities

 

Details of marketable securities held as of  June 30, 2024 and  December 31, 2023 are as follows:

  

June 30, 2024

          

Cumulative

          

Unrealized

  

Fair Value

 

Basis

 

(Loss) Gain

Equity securities

 $18  $34  $(16)

Total

 $18  $34  $(16)

 

  

December 31, 2023

          

Cumulative

          

Unrealized

  

Fair Value

 

Basis

 

(Loss) Gain

Equity securities

 $22  $34  $(12)

Total

 $22  $34  $(12)

 

Net Investment Income

 

Net investment income represents income primarily from the following sources:

 

Income earned from investments in money market funds (recorded in Cash and cash equivalents)

 

Dividends received from Marketable securities

 

Income from unconsolidated or equity method investments

 

The following table presents the components of Net investment income:

  

Three Months Ended June 30,

 

Six Months Ended June 30,

  

2024

 

2023

 

2024

 

2023

Interest on cash and cash equivalents

 $538  $275  $1,037  $473 

Net investment income

 $538  $275  $1,037  $473 

 

Net Gains (Losses)

 

Net gains and losses are determined by specific identification. The net realized gains and losses are generated primarily from the following sources:

 

Realized gains and losses from investments in Marketable securities

 

Changes in the fair value of investments in Marketable securities

 

The following table presents the components of Net gains (losses):

  

Three Months Ended June 30,

 

Six Months Ended June 30,

  

2024

 

2023

 

2024

 

2023

Marketable securities

 $(1) $43  $(4) $388 

Net (losses) gains

 $(1) $43  $(4) $388 

 

 

 

11

The LGL Group, Inc.
Notes to the Condensed Consolidated Financial Statements (Unaudited)
(Dollar amounts in thousands, unless otherwise stated)

 

5. Fair Value Measurements

 

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Fair value guidance identifies three primary valuation techniques: the market approach, the income approach and the cost approach. The market approach uses prices and other relevant information generated by market transactions involving identical or comparable assets or liabilities. The income approach uses valuation techniques to convert future amounts, such as cash flows or earnings, to a single present amount. The measurement is based on the value indicated by current market expectations about those future amounts. The cost approach is based on the amount that currently would be required to replace the service capacity of an asset.

 

Fair Value Hierarchy

 

The fair value hierarchy prioritizes the inputs to valuation techniques used to measure fair value into three broad levels. The fair value hierarchy gives the highest priority to observable inputs such as quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). The maximization of observable inputs and the minimization of the use of unobservable inputs are required.

 

Classification within the fair value hierarchy is based upon the objectivity of the inputs that are significant to the valuation of an asset or liability as of the measurement date. The three levels within the fair value hierarchy are characterized as follows:

 

Level 1 - Quoted prices (unadjusted) in active markets for identical assets or liabilities that the Company has the ability to access at the measurement date.

 

Level 2 - Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly. Level 2 inputs include: quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets or liabilities in markets that are not active; inputs other than quoted prices that are observable for the asset or liability; and inputs that are derived principally from or corroborated by observable market data by correlation or other means.

 

Level 3 - Unobservable inputs for the asset or liability for which there is little, if any, market activity for the asset or liability at the measurement date. Unobservable inputs reflect the Company's own assumptions about what market participants would use to price the asset or liability. These inputs may include internally developed pricing models, discounted cash flow methodologies as well as instruments for which the fair value determination requires significant management judgment.

 

The following is a description of the valuation methodologies used for instruments carried at fair value. These methodologies are applied to asset and liabilities across the levels discussed above, and the observability of the inputs used determines the appropriate level in the fair value hierarchy for the respective asset or liability.

 

Valuation Methodologies of Financial Instruments Measured at Fair Value

 

Cash and cash equivalents - Money market instruments are measured at cost, which approximates fair values because of the relatively short time to maturity.

 

Equity securities - Whenever available, we obtained quoted prices in active markets for identical assets as of the balance sheet date to measure equity securities. Market price data is generally obtained from exchange or dealer markets.

 

Assets and Liabilities Measured at Fair Value on a Recurring Basis

 

The following table presents information about assets measured at fair value on a recurring basis and indicates the level of the fair value measurement based on the observability of inputs used:

  

June 30, 2024

  

Level 1

 

Level 2

 

Level 3

 

Total

Cash and cash equivalents (a)

 $40,612  $  $  $40,612 

Marketable securities:

                

Equity securities

  18         18 

Total marketable securities

  18         18 

Total

 $40,630  $  $  $40,630 

 

  

December 31, 2023

  

Level 1

 

Level 2

 

Level 3

 

Total

Cash and cash equivalents (a)

 $40,229  $  $  $40,229 

Marketable securities:

                

Equity securities

  22         22 

Total marketable securities

  22         22 

Total

 $40,251  $  $  $40,251 

(a)

As of June 30, 2024 and December 31, 2023, included investments in money market mutual funds managed or advised by GAMCO Investors, Inc.

 

There were no liabilities subject to fair value on a recurring basis as of  June 30, 2024 and December 31, 2023.

 

 

12

The LGL Group, Inc.
Notes to the Condensed Consolidated Financial Statements (Unaudited)
(Dollar amounts in thousands, unless otherwise stated)

 

Fair Value Measurements on a Non-Recurring Basis

 

The Company has other assets that may be subject to measurement at fair value on a non-recurring basis including goodwill and intangible assets and other long-lived assets. The Company reviews goodwill annually and the carrying value of long-lived assets whenever events and circumstances indicate that the carrying amounts of the assets may not be recoverable. If it is determined that the assets are impaired, the carrying value would be reduced to an estimated recoverable value. The Company's common stock warrants (as defined below) were measured at fair value as disclosed in Note 10 - Stockholders' Equity.

 

As of June 30, 2024 and December 31, 2023, the Company did not write down any assets to fair value.

 

Fair Value Information about Financial Instruments Not Measured at Fair Value

 

As of June 30, 2024 and December 31, 2023, the Company did have any assets or liabilities classified as financial instruments that were not measured at fair value.

 

 

6. Variable Interest Entities

 

The Company holds variable interests in certain entities in the form of equity investments. The Company consolidates an entity under the variable interest entity ("VIE") guidance when it is determined the Company is the primary beneficiary.

 

The Company has no right to the benefits from, nor does it bear the risk associated with, VIEs beyond the Company's direct equity investments in these entities. If the Company were to liquidate, the assets held by VIEs would not be available to the general creditors of the Company as a result of the liquidation.

 

During June 2023, the Company was appointed as sole managing member of LGL Systems Nevada Management Partners, LLC ("LGL Nevada") and invested approximately $4 into LGL Nevada, representing the Company's 1.0% general partnership interest. Concurrently, Lynch Capital, a wholly owned subsidiary of the Company, invested $1,000 into LGL Systems Acquisition Holding Company, LLC ("LGL Systems"), representing 34.8% of the memberships in LGL Systems, which is controlled by LGL Nevada. As a result, the Company determined it was the primary beneficiary of LGL Systems and was therefore required to consolidate LGL Systems.

 

Consolidated VIEs

 

The Company's only consolidated VIE is LGL Systems.

 

The following table summarizes the assets and liabilities of LGL Systems included in the Condensed Consolidated Balance Sheets:

  

June 30, 2024

 

December 31, 2023

Assets:

        

Current assets:

        

Cash and cash equivalents

 $3,004  $2,932 

Accounts receivable

  14   14 

Total current assets

  3,018   2,946 

Total assets

 $3,018  $2,946 
         

Total liabilities

 $  $ 

 

As of June 30, 2024 and December 31, 2023, the non-controlling interests in LGL Systems was $1,966 and $1,920, respectively. 

 

Unconsolidated VIEs

 

The Company's only unconsolidated VIE is LGL Nevada.

 

We calculate our maximum exposure to loss to be (i) the amount invested in the debt or equity of the VIE and (ii) other commitments and guarantees to the VIE.

  

June 30, 2024

 

December 31, 2023

Total assets

 $595  $588 
         

Maximum exposure to loss:

        

On-balance sheet (a)

  3   3 

Off-balance sheet

      

Total

 $3  $3 

(a)

As of  June 30, 2024 and December 31, 2023, our investment in LGL Nevada was recorded in Other assets in the Condensed Consolidated Balance Sheets.

 

LGL Systems Nevada Management Partners LLC

LGL Nevada was formed in October 2019 for the purpose of performing key management and controls decisions of LGL Systems. The remaining 99.0% of ownership interests are held by four individuals, two of which are members of Company management. In the event LGL Nevada resigns as manager of LGL Systems, it has the sole right to appoint a new manager.

 

 

 

13

The LGL Group, Inc.
Notes to the Condensed Consolidated Financial Statements (Unaudited)
(Dollar amounts in thousands, unless otherwise stated)

 

7. Related Party Transactions

 

In the normal course of business, the Company enters into various transactions with affiliated companies. Parties are considered to be related of one party has the ability to control or exercise significant influence over the other party in making financial or operating decisions.

 

The following tables summarize income and expenses from transactions with related parties for the three and six months ended  June 30, 2024 and 2023:

  

Three Months Ended June 30,

  

2024

 

2023

  

Income

 

Expense

 

Income

 

Expense

GAMCO Investors, Inc.

 $441  $  $388  $ 

M-tron Industries, Inc.

     (15)     12 

Total

 $441  $(15) $388  $12 

 

  

Six Months Ended June 30,

  

2024

 

2023

  

Income

 

Expense

 

Income

 

Expense

GAMCO Investors, Inc.

 $849  $  $822  $ 

M-tron Industries, Inc.

     (29)     (4)

Total

 $849  $(29) $822  $(4)

 

The following table summarizes assets and liabilities with related parties as of  June 30, 2024 and  December 31, 2023:

  

June 30, 2024

 

December 31, 2023

  

Assets

 

Liabilities

 

Assets

 

Liabilities

GAMCO Investors, Inc.

 $33,488  $  $32,568  $ 

M-tron Industries, Inc.

     74       

Total

 $33,488  $74  $32,568  $ 

 

The material agreements whereby the Company generates revenues and expenses with affiliated entities are discussed below:

 

Investment Activity with GAMCO Investors, Inc.

 

Certain balances held and invested in various mutual funds are managed or advised by GAMCO Investors, Inc. or one of its subsidiaries (collectively, "GAMCO" or the "Fund Manager"), which is related to the Company through certain of our shareholders. All investments, including those in related party mutual funds, are overseen by the independent Investment Committee of the Board of Directors (the "Investment Committee"). The Investment Committee meets regularly to review the alternatives and has determined the current investments most reflect the Company's objective of lower cost, market return and adherence to having a larger proportion of underlying investments directly in United States Treasuries. For the three months ended  June 30, 2024 and 2023, the Company paid the Fund Manager a fund management fee of approximately 8 basis points per annum of the asset balances under management. For the six months ended  June 30, 2024 and 2023, the Company paid the Fund Manager a fund management fee of approximately 8 basis points and 14 basis points per annum, respectively, of the asset balances under management. All fund management fees are not paid directly by the Company and are deducted prior to a fund striking its net asset value ("NAV").

 

As of June 30, 2024, the balance managed by the Fund Manager totaled $33,488, all of which was classified within Cash and cash equivalents on the Condensed Consolidated Balance Sheets. As of December 31, 2023, the balance managed by the Fund Manager totaled $32,568, all of which was classified within Cash and cash equivalents on the Condensed Consolidated Balance Sheets.

 

For the three months ended June 30, 2024, the Company earned income on its investments managed by the Fund Manager totaling $441, all of which was included in Net investment income on the Condensed Consolidated Statements of Operations. For the three months ended June 30, 2023, the Company earned income on its investments managed by the Fund Manager totaling $388, of which $331 was included in Net investment income and $57 was included in Net (losses) gains on the Condensed Consolidated Statements of Operations.

 

For the six months ended June 30, 2024, the Company earned income on its investments managed by the Fund Manager totaling $849, all of which was included in Net investment income on the Condensed Consolidated Statements of Operations. For the six months ended June 30, 2023, the Company earned income on its investments managed by the Fund Manager totaling $822, of which $452 was included in Net investment income and $370 was included in Net (losses) gains on the Condensed Consolidated Statements of Operations.

 

 

14

The LGL Group, Inc.
Notes to the Condensed Consolidated Financial Statements (Unaudited)
(Dollar amounts in thousands, unless otherwise stated)

 

Transactions with M-tron Industries, Inc.

 

Transitional Administrative and Management Services Agreement

On October 7, 2022, the separation of the M-tron Industries, Inc. ("MtronPTI") business from the Company was completed (the "Separation") and the business became an independent, publicly traded company trading on the NYSE American under the stock symbol "MPTI." The Separation was completed through the Company's distribution (the "Distribution") of 100% of the shares of MtronPTI's common stock to holders of the Company's common stock as of the close of business on September 30, 2022, the record date for the Distribution.

 

LGL Group and MtronPTI entered into an Amended and Restated Transitional Administrative and Management Services Agreement ("MtronPTI TSA"), which sets out the terms for services to be provided between the two companies post-separation. The current terms result in a net monthly payment of $4 per month to MtronPTI.

 

For the three months ended June 30, 2024 and 2023, the Company paid MtronPTI $12 under the terms of the MtronPTI TSA, which were recorded in Engineering, selling and administrative on the Condensed Consolidated Statements of Operations. For the six months ended June 30, 2024 and 2023, the Company paid MtronPTI $24, respectively, under the terms of the MtronPTI TSA, which were recorded in Engineering, selling and administrative on the Condensed Consolidated Statements of Operations.

 

Tax Indemnity and Sharing Agreement

LGL Group and MtronPTI entered into a Tax Indemnity and Sharing Agreement ("MtronPTI Tax Agreement"), which sets out the terms for which party would be responsible for taxes imposed on the Company if the distribution, together with certain related transactions, were to fail to qualify as a tax-free transaction under Internal Revenue Code ("IRC") Sections 355 and 368(a)(1)(D) if such failure were the result of actions taken after the Distribution by the Company or MtronPTI.

 

For the three and six months ended June 30, 2024 and 2023, no taxes related to the Distribution have been recorded in the Condensed Consolidated Financial Statements.

 

Other Transactions

LGL Group and MtronPTI have agreed to share salaries and benefits related to certain employees incurred by the Company. For the three and six months ended June 30, 2024, MtronPTI reimbursed the Company $27 and $53, respectively, of the salaries and benefits of certain employees, which represents 50% of those costs and were recorded as a reduction to Engineering, selling and administrative on the Condensed Consolidated Statements of Operations.

 

LGL Group and MtronPTI agreed to share any excess Separation costs. Included in discontinued operations is $28, which represents 50% of the excess Separation costs incurred for six months ended June 30, 2023.

 

 

8. Income Taxes

 

The Company’s quarterly provision for income taxes is measured using an annual effective tax rate, adjusted for discrete items within the period presented. To determine the annual effective tax rate, the Company estimates both the total income (loss) before income taxes for the full year and the jurisdictions in which that income (loss) is subject to tax. The actual effective tax rate for the full year may differ from these estimates if income (loss) before income taxes is greater than or less than what was estimated or if the allocation of income (loss) to jurisdictions in which it is taxed is different from the estimated allocations.

 

The Company's effective tax rates on continuing operations for the three and six months ended June 30, 2024 were 32.1% and 35.4%, respectively. The Company's effective tax rates on continuing operations for the three and six months ended June 30, 2023 were -1.5% and 70.0%, respectively. The effective tax rates differed from the statutory tax rate of 21% primarily due to the impact of uncertain tax positions and state income taxes.

 

 

9. Stock-Based Compensation

 

Under the Company’s 2021 Incentive Plan (the "Plan"), and the prior 2011 Incentive Plan, as amended, stock-based compensation may be issued to employees and non-employee directors. As of June 30, 2024955,070 shares remained available for future issuance under the Plan.

 

The following table summarizes stock-based compensation expense, which includes expenses related to awards granted under the Plan for the periods indicated:

  

Three Months Ended June 30,

 

Six Months Ended June 30,

  

2024

 

2023

 

2024

 

2023

Restricted stock awards

 $9  $  $18  $ 

Total

 $9  $  $18  $ 

 

 

15

The LGL Group, Inc.
Notes to the Condensed Consolidated Financial Statements (Unaudited)
(Dollar amounts in thousands, unless otherwise stated)

 

Restricted Stock Awards

 

The following table summarizes restricted stock awards activity for the period indicated:

  

Number of Shares

 

Weighted Average Grant Date Fair Value

 

Aggregate Grant Date Fair Value

Balance as of December 31, 2023

  20,118  $5.22  $105 

Granted

         

Vested

         

Canceled

         

Balance as of June 30, 2024

  20,118  $5.22  $105 

 

 

10. Stockholders' Equity

 

Shares Outstanding

 

The following table presents a rollforward of outstanding shares for the periods indicated:

  

Six Months Ended June 30, 2024

 

Year Ended December 31, 2023

  

Common Stock Issued

 

Held in Treasury

 

Common Stock Outstanding

 

Common Stock Issued

 

Held in Treasury

 

Common Stock Outstanding

Shares, beginning of year

  5,454,639   (81,584)  5,373,055   5,434,521   (81,584)  5,352,937 

Stock-based compensation

           20,118      20,118 

Shares, end of period

  5,454,639   (81,584)  5,373,055   5,454,639   (81,584)  5,373,055 

 

 

11. Earnings Per Share ("EPS")

 

The following table presents a reconciliation of Net income (loss) and shares used in calculating basis and diluted net income (loss) per common share for the periods indicated:

  

Three Months Ended June 30,

 

Six Months Ended June 30,

  

2024

 

2023

 

2024

 

2023

Numerator for EPS:

                

Income (loss) from continuing operations

 $161  $(130) $204  $55 

Less: Net income from continuing operations attributable to non-controlling interests

  24      46    

Income (loss) attributable to LGL Group common shareholders from continuing operations

  137   (130)  158   55 

Income (loss) from discontinued operations, net of tax

           (28)

Net income (loss) attributable to LGL Group common stockholders

 $137  $(130) $158  $27 
                 

Denominator for EPS:

                

Weighted average common shares outstanding - basic

  5,352,937   5,352,937   5,352,937   5,352,937 

Dilutive effects (a):

                

Warrants

  125,178      190,399    

Restricted stock

  4,428      5,533    

Weighted average common shares outstanding - diluted

  5,482,543   5,352,937   5,548,869   5,352,937 
                 

Income per common share attributable to LGL Group common stockholders:

                

Basic (b):

                

Income (loss) from continuing operations

 $0.03  $(0.02) $0.03  $0.01 

Income (loss) from discontinued operations

           (0.01)

Net income (loss) attributable to LGL Group common stockholders

 $0.03  $(0.02) $0.03  $0.01 
                 

Diluted (b):

                

Income (loss) from continuing operations

 $0.02  $(0.02) $0.03  $0.01 

Income (loss) from discontinued operations

           (0.01)

Net income (loss) attributable to LGL Group common stockholders

 $0.02  $(0.02) $0.03  $0.01 

(a)

For the three and six months ended June 30, 2023, weighted average shares used for calculating earnings per share excludes warrants to purchase 1,051,664 shares of common stock.

(b)

Basic and diluted earnings per share are calculated using actual, unrounded amounts. Therefore, the components of earnings per share may not sum to its corresponding total.

 

 

 

16

The LGL Group, Inc.
Notes to the Condensed Consolidated Financial Statements (Unaudited)
(Dollar amounts in thousands, unless otherwise stated)

 

12. Contingencies

 

In the normal course of business, the Company and its subsidiaries may become defendants in certain product liability, patent infringement, worker claims and other litigation. The Company records a liability when it is probable that a loss has been incurred and the amount is reasonably estimable. The Company is not involved in any legal proceedings other than routine litigation arising in the normal course of business, none of which the Company believes will have a material adverse effect on the Company's business, financial condition or results of operations.

 

 

13. Other Financial Statement Information

 

Inventories, Net

 

The Company reduces the value of its inventories to net realizable value when the net realizable value is believed to be less than the cost of the item.

 

The components of inventory as of  June 30, 2024 and  December 31, 2023 are summarized below:

  

June 30, 2024

 

December 31, 2023

Raw materials

 $363  $271 

Work in process

  54   9 

Finished goods

  3    

Total gross inventory

  420   280 

Reserve for excess and obsolete inventory

  (84)  (76)

Inventories, net

 $336  $204 

 

Intangible Assets, Net

 

The components of intangible assets as of  June 30, 2024 and  December 31, 2023 are summarized below:

  

June 30, 2024

 

December 31, 2023

Intellectual property

 $214  $214 

Gross intangible assets

  214   214 

Less: Accumulated amortization

  (168)  (157)

Intangible assets, net

 $46  $57 

 

 

14. Domestic and Foreign Revenues

 

Significant foreign revenues from operations (10% or more of foreign sales) were as follows:

  

Three Months Ended June 30,

 

Six Months Ended June 30,

  

2024

 

2023

 

2024

 

2023

Spain

 $56  $236  $104  $236 

India

  15      99   23 

Romania

        94    

Australia

  87   5   87   5 

Canada

  11   47   12   90 

All other foreign countries

  15   46   47   57 

Total foreign revenues

 $184  $334  $443  $411 

Total domestic revenue

 $347  $69  $480  $433 

 

The Company allocates its foreign revenue based on the customer's ship-to location.

 

 

15. Subsequent Events

 

The Company has evaluated events and transactions that occurred after the balance sheet data through the date that the Condensed Consolidated Financial Statements were issued. Based upon this review, the Company did not identify any subsequent events that would have required adjustment or disclosure in the Condensed Consolidated Financial Statements.

 

 
17

 

 

Item 2.

Managements Discussion and Analysis of Financial Condition and Results of Operations

 

The following discussion and analysis of the Company's financial condition and results of operations should be read in conjunction with the accompanying unaudited Condensed Consolidated Financial Statements, the notes thereto and the other unaudited financial data included in this Quarterly Report on Form 10-Q. The following discussion should also be read in conjunction with the audited consolidated financial statements and the notes thereto, and "Management's Discussion and Analysis of Financial Condition and Results of Operations" included in the Company's Annual Report on Form 10-K for the year ended December 31, 2023 as filed with the SEC on April 1, 2024. The terms "LGL," "LGL Group," "we," "our," "us," or the "Company" refer to The LGL Group, Inc. and its consolidated subsidiaries and unless otherwise defined herein, capitalized terms used herein shall have the same meanings as set forth in our condensed consolidated financial statements and the notes thereto.

 

Unless otherwise stated, all dollar amounts are in thousands.

 

In addition to historical data, this discussion contains forward-looking statements about our business, operations and financial performance based on current expectations that involve risks, uncertainties and assumptions. Actual results may differ materially from those discussed in the forward-looking statements as a result of various factors. See the Cautionary Statement Concerning Forward-Looking Statements included in this Quarterly Report on Form 10-Q.

 

Overview

 

The Company is a holding company engaged in services, merchant investment, and manufacturing business activities. The Company, through its manufacturing business subsidiary, is engaged in the designing, manufacturing, and marketing of high-performance Frequency and Time Reference Standards that form the basis for timing and synchronization in various applications. The Company's primary markets are communications, networking, aerospace, defense, instrumentation, and industrial markets.

 

The accompanying unaudited condensed consolidated financial statements include the accounts of The LGL Group, Inc., its majority-owned subsidiaries, and variable interest entities (“VIE”) of which we are the primary beneficiary.

 

We provide our products and services through our Electronic Instruments and Merchant Investment businesses. Activities not related to our business segments, such as our corporate operations and corporate-level assets and financial obligations, are included in Corporate.

 

Electronic Instruments Business

 

We operate our manufacturing business currently through our subsidiary, Precise Time and Frequency, LLC ("PTF"), a globally positioned producer of industrial Electronic Instruments and commercial products and services. Founded in 2002, PTF operates from our design and manufacturing facility in Wakefield, Massachusetts.

 

Merchant Investment Business

 

The LGL investment business is comprised of various investment vehicles in which LGL is either shareholder, partner, or has general partner interests, and through which LGL invests its capital. The Company seeks to invest available cash and cash equivalents in liquid investments with a view to enhancing returns as we continue to assess further acquisitions of, or investments in, operating businesses broadly. LGL core strengths include identifying and acquiring undervalued assets and businesses, often through the purchase of securities, increasing value through management, financial or other operational changes, and managing complex legal, regulatory or financial issues, which may include technical, engineering, environmental, zoning, permitting and licensing issues among others.

 

As of June 30, 2024, LGL Group had investments (classified within Cash and cash equivalents and Marketable securities) with a fair value of approximately $41.1 million, of which $24.1 million was held within the Merchant Investment business. The Company accounts for its Marketable securities under Financial Accounting Standards Board ("FASB") Accounting Standards Codification ("ASC") Topic 321, Investments - Equity Securities ("ASC 321") and as such, its Marketable securities are reported at fair value on its Consolidated Balance Sheets.

 

Market Conditions and Search Process

During the first half of 2024, mergers and acquisitions continued to be impacted by macroeconomic conditions such as higher borrowing costs, inflationary pressures, increased regulatory scrutiny, and political uncertainty. The initial public offering ("IPO") market has been relatively weak with continued pressure on private equity sponsors to monetize their portfolio companies, which has improved the pace and quality of deal flow to our team.

 

Our search process leverages our professional networks and relationships, participation in industry events and conferences, monitoring of industry trends and news, and interactions with our shareholders, investment banks, and other intermediaries. We continue to seek small- to mid-sized opportunities with strong cash flow generating capacity that trade at reasonable multiples with competitive products or services and with defensible market positions or intellectual property.

 

Trends and Uncertainties

 

We are not aware of any material trends or uncertainties, other than global macroeconomic conditions affecting our industry generally that may reasonably be expected to have a material impact, favorable or unfavorable, on our revenues or income other than those listed below and those listed in Item 1A, Risk Factors, of our Annual Report on Form 10-K for the year ended December 31, 2023, as filed with the SEC on April 1, 2024.

 

 

 

Inflation and Changing Interest Rates

 

Inflation in the United States decreased from 6.5% as of December 31, 2022 to 3.4% as of December 31, 2023, which is still above the U.S. Federal Reserve's long-term target of 2.0%. Through the date of filing of this Quarterly Report on Form 10-Q, inflation has further decreased to 3.0%. Although inflation is expected to continue to decrease in 2024, the continued higher inflationary conditions may have an adverse impact on our Manufacturing cost of sales and Engineering, selling and administrative expenses, as these costs could increase at a rate higher than our revenue. As a result, we have increased the prices we charge our customers.

 

The U.S. Federal Reserve raised the federal funds rate a total of four times throughout 2023, resulting in a range from 5.25% to 5.50% as of December 31, 2023. Through the date of filing of this Quarterly Report on Form 10-Q, the Federal Reserve has maintained the federal funds rate in the same range as of December 31, 2023. It is expected that the U.S. Federal Reserve will continue to hold the federal funds rate steady or start to decrease it during 2024 to, among other things, control inflation; however, the timing of any such decrease remains unclear. If interest rates start to decline, the returns generated by our investments in U.S. Treasuries could be adversely impacted.

 

Results of Operations - Consolidated

 

Three months ended June 30, 2024 compared to three months ended June 30, 2023

 

The following table presents our Condensed Statements of Operations for the periods indicated:

   

Three Months Ended June 30,

               

(in thousands)

 

2024

 

2023

 

$ Change

 

% Change

Revenues:

                               

Net sales

  $ 531     $ 403     $ 128       31.8 %

Net investment income

    538       275       263       95.6 %

Net (losses) gains

    (1 )     43       (44 )     -102.3 %

Total revenues

    1,068       721       347       48.1 %

Expenses:

                               

Manufacturing cost of sales

    214       208       6       2.9 %

Engineering, selling and administrative

    617       645       (28 )     -4.3 %

Total expenses

    831       853       (22 )     -2.6 %

Income (loss) from continuing operations before income taxes

    237       (132 )     369       -279.5 %

Income tax expense (benefit)

    76       (2 )     78       -3900.0 %

Net income (loss) from continuing operations

    161       (130 )     291       -223.8 %

Income (loss) from discontinued operations, net of tax

                   

n/m

 

Net income (loss)

    161       (130 )     291       -223.8 %

Less: Net income attributable to non-controlling interests

    24             24    

n/m

 

Net income (loss) attributable to LGL Group common stockholders

  $ 137     $ (130 )   $ 267       -205.4 %

 

Total Revenues

Total revenues increased $347, or 48.1%, from $721 for the three months ended June 30, 2023 to $1,068 for the three months ended June 30, 2024. The following items contributed to the overall increase:

 

a $128, or 31.8%, increase in Net sales from $403 for the three months ended June 30, 2023 to $531 for the three months ended June 30, 2024 primarily due to higher product shipments during Q2 2024; and

 

a $263, or 95.6%, increase in Net investment income from $275 for the three months ended June 30, 2023 to $538 for the three months ended June 30, 2024 primarily due to investments in higher yielding United States Treasury money market funds.

 

Total Expenses

Total expenses decreased $22, or 2.6%, from $853 for the three months ended June 30, 2023 to $831 for the three months ended June 30, 2024. The decrease was primarily due to a $28, or 4.3%, decrease in Engineering, selling and administrative from $645 for the three months ended June 30, 2023 to $617 for the three months ended June 30, 2024 driven by lower accounting and other professional fees.

 

Gross Margin

Gross margin (Net sales less Manufacturing cost of sales as a percentage of Net sales) increased 1,130 basis points from 48.4% for the three months ended June 30, 2023 to 59.7% for the three months ended June 30, 2024 reflecting increased sales of higher margin products.

 

Income Tax Expense

Income tax expense (benefit) increased $78, or 3900.0%, from ($2) for the three months ended June 30, 2023 to $76 for the three months ended June 30, 2024 primarily due to the increase in Income from continuing operations.

 

Net Income Attributable to Non-Controlling Interests

Net income attributable to non-controlling interests increased $24 from $0 for the three months ended June 30, 2023 to $24 for the three months ended June 30, 2024 primarily due to the consolidation of LGL Systems in June 2023, which has minority shareholders.

 

 

 

Six months ended June 30, 2024 compared to six months ended June 30, 2023

 

The following table presents our Condensed Statements of Operations for the periods indicated:

   

Six Months Ended June 30,

               

(in thousands)

 

2024

 

2023

 

$ Change

 

% Change

Revenues:

                               

Net sales

  $ 923     $ 844     $ 79       9.4 %

Net investment income

    1,037       473       564       119.2 %

Net (losses) gains

    (4 )     388       (392 )     -101.0 %

Total revenues

    1,956       1,705       251       14.7 %

Expenses:

                               

Manufacturing cost of sales

    418       400       18       4.5 %

Engineering, selling and administrative

    1,222       1,187       35       2.9 %

Total expenses

    1,640       1,587       53       3.3 %

Income from continuing operations before income taxes

    316       118       198       167.8 %

Income tax expense

    112       63       49       77.8 %

Net income (loss) from continuing operations

    204       55       149       270.9 %

Income (loss) from discontinued operations, net of tax

          (28 )     28       -100.0 %

Net income

    204       27       177       655.6 %

Less: Net income attributable to non-controlling interests

    46             46    

n/m

 

Net income attributable to LGL Group common stockholders

  $ 158     $ 27     $ 131       485.2 %

 

Total Revenues

Total revenues increased $251, or 14.7%, from $1,705 for the six months ended June 30, 2023 to $1,956 for the six months ended June 30, 2024. The following items contributed to the overall increase:

 

a $79, or 9.4%, increase in Net sales from $844 for the six months ended June 30, 2023 to $923 for the six months ended June 30, 2024 primarily due to operational efficiencies and higher product shipments; and

 

a $564, or 119.2%, increase in Net investment income from $473 for the six months ended June 30, 2023 to $1,037 for the six months ended June 30, 2024 primarily due to investments in higher yielding United States Treasury money market funds.

 

The increase was partially offset by a $392, or 101.0%, decrease in Net gains (losses) from $388 for the six months ended June 30, 2023 to ($4) for the six months ended June 30, 2024 primarily due to lower mark-to-market movements of Marketable securities and no sales of Marketable securities.

 

Total Expenses

Total expenses increased $53, or 3.3%, from $1,587 for the six months ended June 30, 2023 to $1,640 for the six months ended June 30, 2024. The increase was primarily due to a $35, or 2.9%, increase in Engineering, selling and administrative from $1,187 for the six months ended June 30, 2023 to $1,222 for the six months ended June 30, 2024 driven by higher wages and benefits.

 

Gross Margin

Gross margin (Net sales less Manufacturing cost of sales as a percentage of Net sales) increased 210 basis points from 52.6% for the six months ended June 30, 2023 to 54.7% for the six months ended June 30, 2024 reflecting increased sales of higher margin products.

 

Income Tax Expense

Income tax expense increased $49, or 77.8%, from $63 for the six months ended June 30, 2023 to $112 for the six months ended June 30, 2024 primarily due to the increase in Income from continuing operations.

 

Net Income Attributable to Non-Controlling Interests

Net income attributable to non-controlling interests increased $46 from $0 for the six months ended June 30, 2023 to $46 for the six months ended June 30, 2024 primarily due to the consolidation of LGL Systems in June 2023, which has minority shareholders.

 

Backlog

As of June 30, 2024, our order backlog was $737, an increase of $594, or 415.4%, from $143 as of December 31, 2023 and an increase of $413, or 127.5%, from $324 as of June 30, 2023. The backlog of unfilled orders includes amounts based on signed contracts likely to be fulfilled largely in the next 12 months but usually will ship within the next 90 days. Order backlog is adjusted quarterly to reflect project cancellations, deferrals, and revised project scope and cost, if any.

 

 

 

Results of Operations - Operating Segments

 

Electronic Instruments

 

Three months ended June 30, 2024 compared to three months ended June 30, 2023

The following table presents income from continuing operations of our Electronic Instruments segment for the periods indicated:

   

Three Months Ended June 30,

               

(in thousands)

 

2024

 

2023

 

$ Change

 

% Change

Revenues:

                               

Net sales

  $ 531     $ 403     $ 128       31.8 %

Total revenues

    531       403       128       31.8 %

Expenses:

                               

Manufacturing cost of sales

    214       208       6       2.9 %

Engineering, selling and administrative

    243       173       70       40.5 %

Total expenses

    457       381       76       19.9 %

Income from continuing operations before income taxes

  $ 74     $ 22     $ 52       236.4 %

 

Income from Continuing Operations Before Income Taxes

Income from continuing operations before income taxes increased $52, or 236.4%, from $22 for the three months ended June 30, 2023 to $74 for the three months ended June 30, 2024. The increase was primarily due to a $128, or 31.8%, increase in Net sales reflecting higher product shipments during Q2 2024 and higher backlog as of March 31, 2024 partially offset by a $70, or 40.5%, increase in Engineering, selling and administrative driven by higher wages and benefits.

 

Six months ended June 30, 2024 compared to six months ended June 30, 2023

The following table presents income from continuing operations of our Electronic Instruments segment for the periods indicated:

   

Six Months Ended June 30,

               

(in thousands)

 

2024

 

2023

 

$ Change

 

% Change

Revenues:

                               

Net sales

  $ 923     $ 844     $ 79       9.4 %

Total revenues

    923       844       79       9.4 %

Expenses:

                               

Manufacturing cost of sales

    418       400       18       4.5 %

Engineering, selling and administrative

    429       350       79       22.6 %

Total expenses

    847       750       97       12.9 %

Income from continuing operations before income taxes

  $ 76     $ 94     $ (18 )     -19.1 %

 

Income from Continuing Operations Before Income Taxes

Income from continuing operations before income taxes decreased $18, or 19.1%, from $94 for the six months ended June 30, 2023 to $76 for the six months ended June 30, 2024. The decrease was primarily due to:

 

a $18, or 4.5%, increase in Manufacturing cost of sales driven by the growth in Net sales; and

 

a $79, or 22.6%, increase in Engineering, selling and administrative driven by higher wages and benefits.

 

The decrease was partially offset by a $79, or 9.4%, increase in Net sales driven by operational efficiencies and higher product shipments.

 

 

 

Merchant Investment

 

Three months ended June 30, 2024 compared to three months ended June 30, 2023

The following table presents income from continuing operations of our Merchant Investment segment for the periods indicated:

   

Three Months Ended June 30,

           

(in thousands)

 

2024

 

2023

 

$ Change

   

% Change

Revenues:

                           

Net investment income

  $ 315     $     $ 315    

n/m

Total revenues

    315             315    

n/m

Expenses:

                           

Engineering, selling and administrative

    78             78    

n/m

Total expenses

    78             78    

n/m

Income from continuing operations before income taxes

  $ 237     $     $ 237    

n/m

 

Income from Continuing Operations Before Income Taxes

Income from continuing operations before income taxes increased $237 from $0 for the three months ended June 30, 2023 to $237 for the three months ended June 30, 2024 due to the commencement of operations of Lynch Capital International, LLC in June 2023.

 

Six months ended June 30, 2024 compared to six months ended June 30, 2023

The following table presents income from continuing operations of our Merchant Investment segment for the periods indicated:

   

Six Months Ended June 30,

           

(in thousands)

 

2024

 

2023

 

$ Change

 

% Change

Revenues:

                           

Net investment income

  $ 604     $     $ 604    

n/m

Total revenues

    604             604    

n/m

Expenses:

                           

Engineering, selling and administrative

    127             127    

n/m

Total expenses

    127             127    

n/m

Income from continuing operations before income taxes

  $ 477     $     $ 477    

n/m

 

Income from Continuing Operations Before Income Taxes

Income from continuing operations before income taxes increased $477 from $0 for the six months ended June 30, 2023 to $477 for the six months ended June 30, 2024 due to the commencement of operations of Lynch Capital International, LLC in June 2023.

 

 

 

Corporate

 

Three months ended June 30, 2024 compared to three months ended June 30, 2023

The following table presents income from continuing operations of our Corporate segment for the periods indicated:

   

Three Months Ended June 30,

               

(in thousands)

 

2024

 

2023

 

$ Change

 

% Change

Revenues:

                               

Net investment income

  $ 223     $ 275     $ (52 )     -18.9 %

Net (losses) gains

    (1 )     43       (44 )     -102.3 %

Total revenues

    222       318       (96 )     -30.2 %

Expenses:

                               

Engineering, selling and administrative

    296       472       (176 )     -37.3 %

Total expenses

    296       472       (176 )     -37.3 %

Loss from continuing operations before income taxes

  $ (74 )   $ (154 )   $ 80       -51.9 %

 

Loss from Continuing Operations Before Income Taxes

Loss from continuing operations before income taxes decreased $80, or 51.9%, from $154 for the three months ended June 30, 2023 to $74 for the three months ended June 30, 2024. The decrease was primarily due to a $176, or 37.3%, decrease in Engineering, selling and administrative related to lower accounting and other professional service fees as well as other administrative and corporate expenses.

 

The decrease partially offset by:

 

a $52, or 18.9%, decrease in Net investment income reflecting investments in higher yielding United States Treasury money market funds; and

 

a $44, or 102.3%, decrease in Net (losses) gains driven by lower mark-to-market movements of Marketable securities and no sales of Marketable securities during the three months ended June 30, 2024.

 

Six months ended June 30, 2024 compared to six months ended June 30, 2023

The following table presents income from continuing operations of our Corporate segment for the periods indicated:

   

Six Months Ended June 30,

               

(in thousands)

 

2024

 

2023

 

$ Change

 

% Change

Revenues:

                               

Net investment income

  $ 433     $ 473     $ (40 )     -8.5 %

Net (losses) gains

    (4 )     388       (392 )     -101.0 %

Total revenues

    429       861       (432 )     -50.2 %

Expenses:

                               

Engineering, selling and administrative

    666       837       (171 )     -20.4 %

Total expenses

    666       837       (171 )     -20.4 %

(Loss) income from continuing operations before income taxes

  $ (237 )   $ 24     $ (261 )     -1087.5 %

 

(Loss) income from Continuing Operations Before Income Taxes

(Loss) income from continuing operations before income taxes decreased $261, or 1087.5%, from $24 for the six months ended June 30, 2023 to ($237) for the six months ended June 30, 2024. The decrease was primarily due to a $392, or 101.0%, decrease in Net (losses) gains as there were lower mark-to-market movements and sales of Marketable securities during the six months ended June 30, 2024.

 

The decrease was partially offset by a $171, or 20.4%, decrease in Engineering, selling and administrative reflecting lower accounting and other professional service fees as well as other administrative and corporate expenses.

 

 

 

Liquidity and Capital Resources

 

Overview

Liquidity refers to our ability to access sufficient sources of cash to meet the requirements of our operating, investing and financing activities.

 

Capital refers to our long-term financial resources available to support business operations and future growth.

 

Our ability to generate and maintain sufficient liquidity and capital depends on the profitability of the businesses, timing of cash flows, general economic conditions and access to the capital markets and the other sources of liquidity and capital described herein.

 

As of June 30, 2024 and December 31, 2023, Cash and cash equivalents were $41,074 and $40,711, respectively.

 

Cash Flow Activity

The following table presents the cash flow activity for the periods indicated:

   

As of June 30,

(in thousands)

 

2024

 

2023

Cash and cash equivalents, beginning of period

  $ 40,711     $ 21,507  

Cash provided by (used in) operating activities

    363       (9 )

Cash provided by investing activities

          18,816  

Net change in cash and cash equivalents

    363       18,807  

Cash and cash equivalents, end of period

  $ 41,074     $ 40,314  

 

Operating Activities

Cash provided by operating activities was $363 for the six months ended June 30, 2024 compared to cash used in operating activities of $9 for the six months ended June 30, 2023, an increase of $372, primarily due to the following:

 

Net gains (losses) decreased $392 from $388 for the six months ended June 30, 2023 to ($4) for the six months ended June 30, 2024 as there were lower mark-to-market movements on Marketable securities and no sales of Marketable securities during the six months ended June 30, 2024.

 

The increase was partially offset by:

 

Net change in operating assets and liabilities decreased $218 from $327 for the six months ended June 30, 2023 to $109 for the six months ended June 30, 2024.

 

Our working capital metrics and ratios were as follows:

(in thousands)

 

June 30, 2024

 

December 31, 2023

Current assets

  $ 42,003     $ 41,566  

Less: Current liabilities

    621       474  

Working capital

  $ 41,382     $ 41,092  
                 

Current ratio

    67.6       87.7  

 

Management continues to focus on efficiently managing working capital requirements to match operating activity levels and will seek to deploy the Company’s working capital where it will generate the greatest returns.

 

Investing Activities

Cash provided by investing activities was $0 for the six months ended June 30, 2024 compared to cash provided by investing activities of $18,816 for the six months ended June 30, 2023, a decrease of $18,816, primarily due to sales of IronNet, Inc. during the six months ended June 30, 2023.

 

Capital Resources

We believe that existing cash and cash equivalents, marketable securities and cash generated from operations will provide sufficient liquidity to meet our ongoing working capital and capital expenditure requirements for the next 12 months from the date of this filing and for the foreseeable future.

 

Our Board has adhered to a practice of not paying cash dividends. This policy takes into account our long-term growth objectives, including our anticipated investments for organic growth, potential acquisitions and stockholders' desire for capital appreciation of their holdings. No cash dividends have been paid to the Company's stockholders since January 30, 1989, and none are expected to be paid for the foreseeable future.

 

Contractual Obligations

 

As of June 30, 2024, there have been no material changes in our contractual obligations from December 31, 2023, a description of which may be found in Part II, Item 7. Management Discussion and Analysis - Liquidity and Capital Resources - Contractual Obligations in the 2023 Annual Report.

 

 

Critical Accounting Estimates

 

Our accompanying Condensed Consolidated Financial Statements are prepared in conformity with U.S. GAAP, which requires management to make estimates and assumptions that affect the amounts reported in our financial statements and accompanying footnotes. These estimates are made and evaluated on an on-going basis using information that is currently available as well as various other assumptions believed to be reasonable under the circumstances. Actual results could differ from those estimates, perhaps in material adverse ways, and those estimates could be different under different assumptions or conditions. For a discussion of the Company’s critical accounting estimates, see Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations in our Annual Report on Form 10-K for the year ended December 31, 2023.

 

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

 

Not applicable.

 

Item 4.

Controls and Procedures

 

Evaluation of Disclosure Controls and Procedures 

 

We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in our reports under the Securities Exchange Act of 1934, as amended (the "Exchange Act") is recorded, processed, summarized and reported within the time periods specified in the rules and forms, and that such information is accumulated and communicated to us, including our Principal Executive Officer and Principal Financial Officer, as appropriate, to allow timely decisions regarding required disclosure. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

 

As required by Rules 13a-15(b) and 15d-15(b) of the Exchange Act, an evaluation as of June 30, 2024 was conducted under the supervision and with the participation of our management, including our Principal Executive Officer and Principal Financial Officer, of the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act). Based on this evaluation, our Principal Executive Officer and Principal Financial Officer concluded that our disclosure controls and procedures, as of June 30, 2024, were effective.

 

Changes in Internal Control Over Financial Reporting

 

There were no changes in the Company’s internal control over financial reporting during the quarter ended June 30, 2024 that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

 

 

PART II

 

OTHER INFORMATION

 

Item 1.

Legal Proceedings

 

In the ordinary course of business, we may become subject to litigation or claims. We are not aware of any material pending legal proceedings, other than ordinary routine litigation incidental to our business, to which we or our subsidiaries are a party or to which our properties are subject.

 

Item 1A.

Risk Factors

 

For a discussion of the Company's potential risks and uncertainties, refer to Part I, Item 1A. Risk Factors in the  2023 Annual Report and  Trends and  Uncertainties in Management's Discussion and Analysis of Financial Condition and Results of Operations in Part I, Item 2. of this Quarterly Report on Form 10-Q.

 

We are not aware of any material trends or uncertainties, other than national economic conditions affecting our industry generally, that may reasonably be expected to have a material impact, favorable or unfavorable, on our revenues or income other than those listed in Item 1A, Risk Factors, of our Annual Report on Form 10-K for the year ended December 31, 2023.

 

Item 5.

Other Information

 

During the three months ended  June 30, 2024none of our directors or officers, as defined in Section 16 of the Exchange Act, adopted or terminated a "Rule 10b5-1 trading arrangement" or a "non-Rule 10b5-1 trading arrangement," as each term is defined in Item 408 of Regulation S-K of the Exchange Act.

 

Item 6.

Exhibits

 

The following exhibits are included, or incorporated by reference, in this Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2024 (and are numbered in accordance with Item 601 of Regulation S-K):

 

Exhibit No.

 

Description

     

3.1

 

Certificate of Incorporation of The LGL Group, Inc. (incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K filed with the SEC on August 31, 2007).

     

3.2

 

The LGL Group, Inc. By-Laws (incorporated by reference to Exhibit 3.2 to the Company's Current Report on Form 8-K filed with the SEC on August 31, 2007).

     

3.3

 

The LGL Group, Inc. Amendment No. 1 to By-Laws (incorporated by reference to Exhibit 3.1 to the Company's Current Report on Form 8-K filed with the SEC on June 17, 2014).

     

3.4

 

The LGL Group, Inc. Amendment No. 2 to By-Laws (incorporated by reference to Exhibit 3.1 to the Company's Current Report on Form 8-K filed with the SEC on February 21, 2020).

     

3.5

 

The LGL Group, Inc. Amendment No. 3 to By-Laws (incorporated by reference to Exhibit 3.1 to the Company's Current Report on Form 8-K filed with the SEC on February 26, 2020).

     

3.6

 

The LGL Group, Inc. Certificate of Amendment to Certificate of Incorporation (incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K filed with the SEC on January 4, 2022).

     

31.1

 

Certification of the Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.*

     

31.2

 

Certification of the Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.*

     

32.1

 

Certification of the Principal Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.**

     

32.2

 

Certification of the Principal Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.**

 

 

 

Exhibit No.   Description
     

101.INS

 

Inline XBRL Instance Document – the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.*

     

101.SCH

 

Inline XBRL Taxonomy Extension Schema Document*

     

101.CAL

 

Inline XBRL Taxonomy Extension Calculation Linkbase Document*

     

101.DEF

 

Inline XBRL Taxonomy Extension Definition Linkbase Document*

     

101.LAB

 

Inline XBRL Taxonomy Extension Label Linkbase Document*

     

101.PRE

 

Inline XBRL Taxonomy Extension Presentation Linkbase Document*

     

104

 

The cover page for the Company’s Quarterly Report on Form 10-Q has been formatted in Inline XBRL and contained in Exhibit 101*

 

*

Filed herewith

**

In accordance with Item 601(b)(32) of Regulation S-K, this Exhibit is not deemed "filed" for purposes of Section 18 of the Exchange Act or otherwise subject to the liabilities of that section. Such certifications will not be deemed incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Exchange Act, except to the extent that the registrant specifically incorporates it by reference.

 

 

SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

 

 

THE LGL GROUP, INC.

(Registrant)

     

August 13, 2024

By:

/s/ Timothy Foufas

   

TIMOTHY FOUFAS

   

Co-Chief Executive Officer

(Principal Executive Officer)

     

August 13, 2024

By:

/s/ Christopher L. Nossokoff

   

CHRISTOPHER L. NOSSOKOFF

   

Vice President - Finance

(Principal Financial Officer)

 

28

Exhibit 31.1

 

CERTIFICATION OF THE PRINCIPAL EXECUTIVE OFFICER

PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

 

I, Timothy Foufas, certify that:

 

1.

I have reviewed this quarterly report on Form 10-Q of The LGL Group, Inc. for the quarterly period ended June 30, 2024;

 

2.

Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

 

3.

Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

 

4.

The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

 

 

(a)

Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

 

 

(b)

Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

 

 

(c)

Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

 

 

(d)

Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

 

5.

The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

 

 

(a)

All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

 

 

(b)

Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

 

 

August 13, 2024

/s/ Timothy Foufas

 

Name:

Timothy Foufas

 

Title:

Co-Chief Executive Officer

(Principal Executive Officer)

 

 

Exhibit 31.2

 

CERTIFICATION OF THE PRINCIPAL FINANCIAL OFFICER

PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

 

I, Christopher L. Nossokoff, certify that:

 

1.

I have reviewed this quarterly report on Form 10-Q of The LGL Group, Inc. for the quarterly period ended June 30, 2024;

 

2.

Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

 

3.

Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

 

4.

The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

 

 

(a)

Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

 

 

(b)

Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

 

 

(c)

Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

 

 

(d)

Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

 

5.

The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

 

 

(a)

All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

 

 

(b)

Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

 

 

August 13, 2024

/s/ Christopher L. Nossokoff

 

Name:

Christopher L. Nossokoff

 

Title:

Vice President - Finance

(Principal Financial Officer)

 

 

Exhibit 32.1

 

CERTIFICATION OF THE PRINCIPAL EXECUTIVE OFFICER

PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

 

In connection with the quarterly report of The LGL Group, Inc. (the “Company”) on Form 10-Q for the quarterly period ended June 30, 2024, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Timothy Foufas, Principal Executive Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to my knowledge:

 

 

1.

The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

 

 

2.

The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

 

August 13, 2024

 

/s/ Timothy Foufas

   

Name:

Timothy Foufas

   

Title:

Co-Chief Executive Officer

(Principal Executive Officer)

 

 

Exhibit 32.2

 

CERTIFICATION OF THE PRINCIPAL FINANCIAL OFFICER

PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

 

In connection with the quarterly report of The LGL Group, Inc. (the “Company”) on Form 10-Q for the quarterly period ended June 30, 2024, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Christopher L. Nossokoff, Principal Financial Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to my knowledge:

 

 

1.

The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

 

 

2.

The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

 

August 13, 2024

 

/s/ Christopher L. Nossokoff

   

Name:

Christopher L. Nossokoff

   

Title:

Vice President - Finance

(Principal Financial Officer)

 

 
v3.24.2.u1
Document And Entity Information - shares
6 Months Ended
Jun. 30, 2024
Jul. 31, 2024
Document Information [Line Items]    
Entity Central Index Key 0000061004  
Entity Registrant Name LGL GROUP INC  
Amendment Flag false  
Current Fiscal Year End Date --12-31  
Document Fiscal Period Focus Q2  
Document Fiscal Year Focus 2024  
Document Type 10-Q  
Document Quarterly Report true  
Document Period End Date Jun. 30, 2024  
Document Transition Report false  
Entity File Number 001-00106  
Entity Incorporation, State or Country Code DE  
Entity Tax Identification Number 38-1799862  
Entity Address, Address Line One 2525 Shader Rd.  
Entity Address, City or Town Orlando  
Entity Address, State or Province FL  
Entity Address, Postal Zip Code 32804  
City Area Code 407  
Local Phone Number 298-2000  
Entity Current Reporting Status Yes  
Entity Interactive Data Current Yes  
Entity Filer Category Non-accelerated Filer  
Entity Small Business true  
Entity Emerging Growth Company false  
Entity Shell Company false  
Entity Common Stock, Shares Outstanding   5,373,055
Warrant [Member]    
Document Information [Line Items]    
Title of 12(b) Security Warrants to Purchase Common Stock, par value $0.01  
Trading Symbol LGL WS  
Security Exchange Name NYSEAMER  
Common Stock [Member]    
Document Information [Line Items]    
Title of 12(b) Security Common Stock, par value $0.01  
Trading Symbol LGL  
Security Exchange Name NYSEAMER  
v3.24.2.u1
Condensed Consolidated Balance Sheets (Current Period Unaudited) - USD ($)
$ in Thousands
Jun. 30, 2024
Dec. 31, 2023
Current assets:    
Cash and cash equivalents $ 41,074 $ 40,711
Marketable securities 18 22
Accounts receivable, net of reserves of $52 and $58, respectively 339 356
Inventories, net 336 204
Prepaid expenses and other current assets 236 273
Total current assets 42,003 41,566
Right-of-use lease assets 41 75
Intangible assets, net 46 57
Deferred income tax assets 157 152
Total assets 42,247 41,850
Current liabilities:    
Accounts payable 223 93
Accrued compensation and commissions 219 264
Income taxes payable 73 41
Other accrued expenses 106 76
Total current liabilities 621 474
Other liabilities 722 694
Total liabilities 1,343 1,168
Contingencies (Note 12)
Stockholders' equity:    
Common stock ($0.01 par value; 30,000,000 shares authorized; 5,454,639 shares issued and 5,373,055 shares outstanding as of June 30, 2024 and December 31, 2023) 53 53
Treasury stock, at cost (81,584 shares as of June 30, 2024 and December 31, 2023) (580) (580)
Additional paid-in capital 46,367 46,349
Accumulated deficit (6,902) (7,060)
Total LGL Group stockholders' equity 38,938 38,762
Non-controlling interests 1,966 1,920
Total stockholders' equity 40,904 40,682
Total liabilities and stockholders' equity $ 42,247 $ 41,850
v3.24.2.u1
Condensed Consolidated Balance Sheets (Current Period Unaudited) (Parentheticals) - USD ($)
$ in Thousands
Jun. 30, 2024
Dec. 31, 2023
Accounts Receivable, Allowance for Credit Loss, Current $ 52 $ 58
Common Stock, Par or Stated Value Per Share (in dollars per share) $ 0.01 $ 0.01
Common Stock, Shares Authorized (in shares) 30,000,000 30,000,000
Common Stock, Shares, Issued (in shares) 5,454,639 5,373,055
Common Stock, Shares, Outstanding (in shares) 5,454,639 5,373,055
Treasury Stock, Common, Shares (in shares) 81,584 81,584
v3.24.2.u1
Condensed Consolidated Statements of Operations (Unaudited) - USD ($)
$ in Thousands
3 Months Ended 6 Months Ended
Jun. 30, 2024
Jun. 30, 2023
Jun. 30, 2024
Jun. 30, 2023
Revenues:        
Net sales $ 531 $ 403 $ 923 $ 844
Net investment income 538 275 1,037 473
Net (losses) gains (1) 43 (4) 388
Total revenues 1,068 721 1,956 1,705
Expenses:        
Manufacturing cost of sales 214 208 418 400
Engineering, selling and administrative 617 645 1,222 1,187
Total expenses 831 853 1,640 1,587
Income (loss) from continuing operations before income taxes 237 (132) 316 118
Income tax (benefit) expense 76 (2) 112 63
Net income (loss) from continuing operations 161 (130) 204 55
Income (loss) from discontinued operations, net of tax 0 0 0 (28)
Net income (loss) 161 (130) 204 27
Less: Net income attributable to non-controlling interests 24 0 46 0
Net income (loss) attributable to LGL Group common stockholders $ 137 $ (130) $ 158 $ 27
Income (loss) per common share attributable to LGL Group common stockholders:        
Income (loss) from continuing operations (in dollars per share) [1] $ 0.03 $ (0.02) $ 0.03 $ 0.01
Income (loss) from discontinued operations (in dollars per share) [1] 0 0 0 (0.01)
Net income (loss) attributable to LGL Group common stockholders (in dollars per share) [1] 0.03 (0.02) 0.03 0.01
Diluted (a):        
Income (loss) from continuing operations (in dollars per share) [1] 0.02 (0.02) 0.03 0.01
Income (loss) from discontinued operations (in dollars per share) [1] 0 0 0 (0.01)
Net income (loss) attributable to LGL Group common stockholders (in dollars per share) [1] $ 0.02 $ (0.02) $ 0.03 $ 0.01
Weighted average shares outstanding:        
Basic (in shares) 5,352,937 5,352,937 5,352,937 5,352,937
Diluted (in shares) [2] 5,482,543 5,352,937 5,548,869 5,352,937
[1] Basic and diluted earnings per share are calculated using actual, unrounded amounts. Therefore, the components of earnings per share may not sum to its corresponding total.
[2] For the three and six months ended June 30, 2023, weighted average shares used for calculating earnings per share excludes warrants to purchase 1,051,664 shares of common stock.
v3.24.2.u1
Condensed Consolidated Statements of Stockholders' Equity (Unaudited) - USD ($)
$ in Thousands
Common Stock [Member]
Treasury Stock, Common [Member]
Additional Paid-in Capital [Member]
Retained Earnings [Member]
Parent [Member]
Noncontrolling Interest [Member]
Total
Balance at Dec. 31, 2022 $ 53 $ (580) $ 46,346 $ (7,329) $ 38,490 $ 0 $ 38,490
Net income attributable to LGL Group or non-controlling interests 0 0 0 27 27 0 27
Stock-based compensation 0 0 0 0 0 0 0
Consolidation of non-controlling interests 0 0 0 0 0 1,872 1,872
Balance at Jun. 30, 2023 53 (580) 46,346 (7,302) 38,517 1,872 40,389
Balance at Mar. 31, 2023 53 (580) 46,346 (7,172) 38,647 0 38,647
Net income attributable to LGL Group or non-controlling interests 0 0 0 (130) (130) 0 (130)
Stock-based compensation 0 0 0 0 0 0 0
Consolidation of non-controlling interests 0 0 0 0 0 1,872 1,872
Balance at Jun. 30, 2023 53 (580) 46,346 (7,302) 38,517 1,872 40,389
Balance at Dec. 31, 2023 53 (580) 46,349 (7,060) 38,762 1,920 40,682
Net income attributable to LGL Group or non-controlling interests 0 0 0 158 158 46 204
Stock-based compensation 0 0 18 0 18 0 18
Consolidation of non-controlling interests 0 0 0 0 0 0 0
Balance at Jun. 30, 2024 53 (580) 46,367 (6,902) 38,938 1,966 40,904
Balance at Mar. 31, 2024 53 (580) 46,358 (7,039) 38,792 1,942 40,734
Net income attributable to LGL Group or non-controlling interests 0 0 0 137 137 24 161
Stock-based compensation 0 0 9 0 9 0 9
Consolidation of non-controlling interests 0 0 0 0 0 0 0
Balance at Jun. 30, 2024 $ 53 $ (580) $ 46,367 $ (6,902) $ 38,938 $ 1,966 $ 40,904
v3.24.2.u1
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($)
$ in Thousands
6 Months Ended
Jun. 30, 2024
Jun. 30, 2023
Cash flows from operating activities:    
Net income attributable to LGL Group or non-controlling interests $ 204 $ 27
Adjustments to reconcile net income to net cash provided by (used in) operating activities:    
Depreciation 0 1
Amortization of finite-lived intangible assets 11 6
Stock-based compensation 18 0
Realized loss on sale of marketable securities 0 4,316
Unrealized loss (gain) on marketable securities 4 (4,704)
Deferred income taxes 17 18
Changes in operating assets and liabilities:    
Decrease in accounts receivable, net 17 170
(Increase) decrease in inventories, net (132) 39
Decrease in prepaid expenses and other assets 37 185
Decrease (increase) in accounts payable, accrued compensation, income taxes and commissions and other 187 (67)
Total adjustments 159 (36)
Net cash provided by (used in) operating activities 363 (9)
Cash flows from investing activities:    
Cash from consolidation of LGL Systems 0 1,869
Proceeds from sale of marketable securities 0 16,947
Net cash provided by investing activities 0 18,816
Increase in cash and cash equivalents 363 18,807
Cash and cash equivalents at beginning of period 40,711 21,507
Cash and cash equivalents at end of period 41,074 40,314
Supplemental Disclosure:    
Income taxes paid $ 76 $ 134
v3.24.2.u1
Note 1 - Basis of Presentation
6 Months Ended
Jun. 30, 2024
Notes to Financial Statements  
Organization, Consolidation and Presentation of Financial Statements Disclosure [Text Block]

1. Basis of Presentation

 

The LGL Group, Inc. is a holding company engaged in services, merchant investment, and manufacturing business activities. The Company was incorporated in 1928 under the laws of the State of Indiana and reincorporated under the laws of the State of Delaware in 2007. Unless the context indicates otherwise, the terms "LGL," "LGL Group," "we," "us," "our," or the "Company" mean The LGL Group, Inc. and its consolidated subsidiaries.

 

The Company’s manufacturing business is operated through its subsidiary Precise Time and Frequency, LLC ("PTF"), which has operations in Wakefield, Massachusetts. PTF is engaged in the design of high-performance Frequency and Time Reference Standards that form the basis for timing and synchronization in various applications.

 

These unaudited Condensed Consolidated Financial Statements do not include all disclosures that are normally included in annual financial statements prepared in accordance with accounting principles generally accepted in the United States ("U.S. GAAP") and should be read in conjunction with the audited Consolidated Financial Statements and the related notes included in our Annual Report on Form 10-K for the year ended  December 31, 2023 (the "2023 Annual Report") filed with the Securities and Exchange Commission (the "SEC") on April 1, 2024. The consolidated financial information as of  December 31, 2023 included herein has been derived from the audited Consolidated Financial Statements in the 2023 Annual Report

 

The Condensed Consolidated Financial Statements include the accounts of The LGL Group, Inc., its majority-owned subsidiaries, and variable interest entities ("VIEs") of which we are the primary beneficiary.

 

In the opinion of management, these Condensed Consolidated Financial Statements contain all adjustments (consisting of normal recurring adjustments, including eliminations of material intercompany accounts and transactions) considered necessary for a fair statement of the results presented herein. Operating results for the three and six months ended  June 30, 2024 are not necessarily indicative of the results that may be expected for the full year ending December 31, 2024.

 

v3.24.2.u1
Note 2 - Summary of Significant Accounting Policies
6 Months Ended
Jun. 30, 2024
Notes to Financial Statements  
Organization, Consolidation and Presentation of Financial Statements Disclosure and Significant Accounting Policies [Text Block]

2. Summary of Significant Accounting Policies

 

During the three and six months ended June 30, 2024, there were no material changes to our significant accounting policies included in the  2023 Annual Report.  For additional information, refer to Note 2 to the audited Consolidated Financial Statements in the 2023  Annual Report.

 

Use of Estimates

 

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates.

 

Impairment of Long-Lived Assets

 

Long-lived assets, including intangible assets subject to amortization, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of the asset may not be recoverable. Long-lived assets are grouped with other assets to the lowest level to which identifiable cash flows are largely independent of the cash flows of other groups of assets and liabilities. Management assesses the recoverability of the carrying cost of the assets based on a review of projected undiscounted cash flows. If an asset is held for sale, management reviews its estimated fair value less cost to sell. Fair value is determined using pertinent market information, including appraisals or broker's estimates, and/or projected discounted cash flows. In the event an impairment loss is identified, it is recognized based on the amount by which the carrying value exceeds the estimated fair value of the long-lived asset.

 

We performed an assessment to determine if there were any indicators of impairment as a result of the operating conditions resulting as of the periods ended  June 30, 2024 and December 31, 2023. We concluded that, while there were events and circumstances in the macro-environment that did impact us, we did not experience any entity-specific indicators of asset impairment and no triggering events occurred.

 

 

 

Future Application of Accounting Standards

 

Segment Reporting

In November 2023, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2023-07, "Segment Reporting (Topic 280) - Improvements to Reportable Segment Disclosures" ("ASU 2023-07"), to address improvements to reportable segment disclosures. The standard primarily requires the following disclosure on an annual and interim basis: (i) significant segment expenses that are regularly provided to chief operating decision maker ("CODM") and included within each reported measure of segment profit or loss; and (ii) other segment items and description of its composition. The standard also requires current annual disclosures about a reportable segment's profits or losses and assets to be disclosed in interim periods and the title and position of the CODM with an explanation of how the CODM uses the report measure(s) of segment profits or losses in assessing segment performance. The provisions of the standard are effective for public companies for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024, with early adoption permitted. The standard is applied retrospectively to all prior periods presented. We are assessing the impact of this standard.

 

Income Taxes

In December 2023, the FASB issued ASU 2023-09, "Income Taxes (Topic 740) - Improvements to Income Tax Disclosures" ("ASU 2023-09"). The standard requires disaggregated information about a company's effective tax rate reconciliation as well as information on income taxes paid. The provisions of the standard are effective for public companies for fiscal years beginning after December 15, 2024, with early adoption permitted. This standard applies prospectively; however, retrospective application is permitted. We are assessing the impact of this standard.

 

v3.24.2.u1
Note 3 - Segment Information
6 Months Ended
Jun. 30, 2024
Notes to Financial Statements  
Segment Reporting Disclosure [Text Block]

3. Segment Information

 

The Company has identified two reportable business segments: Electronic Instruments and Merchant Investment. These segments are consistent with the manner in which the chief operating decision maker reviews the business to assess performance and allocate resources. A brief description of each segment is below:

 

The Electronic Instruments segment includes all products manufactured and sold by PTF.

 

The Merchant Investment segment includes all activity produced by Lynch Capital International, LLC ("Lynch Capital").

 

The Company includes in Corporate the following corporate and business activities:

 

corporate level assets and financial obligations such as cash and cash equivalents invested in highly liquid U.S. Treasury money market funds and other marketable securities;

 

other items not allocated to or directly related to the Company's operating segments, including items such as deferred tax balances; and

 

intercompany eliminations.

 

The Electronic Instruments and Merchant Investment segments are allocated overhead expenses based on each segment's assets as percentage of total assets.

 

 

 

The following tables presents LGL Group's operations by segment:

  

Three Months Ended June 30, 2024

  

Electronic Instruments

 

Merchant Investment

 

Corporate

 

Consolidated

Revenues:

                

Net sales

 $531  $  $  $531 

Net investment income

     315   223   538 

Net (losses) gains

        (1)  (1)

Total revenues

  531   315   222   1,068 

Expenses:

                

Manufacturing cost of sales

  214         214 

Engineering, selling and administrative

  243   78   296   617 

Total expenses

  457   78   296   831 

Income (loss) from continuing operations before income taxes

  74   237   (74)  237 

Income tax expense

        76   76 

Net income (loss) from continuing operations

  74   237   (150)  161 

Income (loss) from discontinued operations, net of tax

            

Net income (loss)

  74   237   (150)  161 

Less: Net income attributable to non-controlling interests

     24      24 

Net income (loss) attributable to LGL Group common stockholders

 $74  $213  $(150) $137 

 

  

Three Months Ended June 30, 2023

  

Electronic Instruments

 

Merchant Investment

 

Corporate

 

Consolidated

Revenues:

                

Net sales

 $403  $  $  $403 

Net investment income

        275   275 

Net (losses) gains

        43   43 

Total revenues

  403      318   721 

Expenses:

                

Manufacturing cost of sales

  208         208 

Engineering, selling and administrative

  173      472   645 

Total expenses

  381      472   853 

Income (loss) from continuing operations before income taxes

  22      (154)  (132)

Income tax expense (benefit)

        (2)  (2)

Net income (loss) from continuing operations

  22      (152)  (130)

Income (loss) from discontinued operations, net of tax

            

Net income (loss)

  22      (152)  (130)

Less: Net income attributable to non-controlling interests

            

Net income (loss) attributable to LGL Group common stockholders

 $22  $  $(152) $(130)

 

  

Six Months Ended June 30, 2024

  

Electronic Instruments

 

Merchant Investment

 

Corporate

 

Consolidated

Revenues:

                

Net sales

 $923  $  $  $923 

Net investment income

     604   433   1,037 

Net (losses) gains

        (4)  (4)

Total revenues

  923   604   429   1,956 

Expenses:

                

Manufacturing cost of sales

  418         418 

Engineering, selling and administrative

  429   127   666   1,222 

Total expenses

  847   127   666   1,640 

Income (loss) from continuing operations before income taxes

  76   477   (237)  316 

Income tax expense

        112   112 

Net income (loss) from continuing operations

  76   477   (349)  204 

Income (loss) from discontinued operations, net of tax

            

Net income (loss)

  76   477   (349)  204 

Less: Net income attributable to non-controlling interests

     46      46 

Net income (loss) attributable to LGL Group common stockholders

 $76  $431  $(349) $158 

 

  

Six Months Ended June 30, 2023

  

Electronic Instruments

 

Merchant Investment

 

Corporate

 

Consolidated

Revenues:

                

Net sales

 $844  $  $  $844 

Net investment income

        473   473 

Net (losses) gains

        388   388 

Total revenues

  844      861   1,705 

Expenses:

                

Manufacturing cost of sales

  400         400 

Engineering, selling and administrative

  350      837   1,187 

Total expenses

  750      837   1,587 

Income (loss) from continuing operations before income taxes

  94      24   118 

Income tax expense

        63   63 

Net income (loss) from continuing operations

  94      (39)  55 

Income (loss) from discontinued operations, net of tax

        (28)  (28)

Net income (loss)

  94      (67)  27 

Less: Net income attributable to non-controlling interests

            

Net income (loss) attributable to LGL Group common stockholders

 $94  $  $(67) $27 

 

The following table presents LGL Group's identifiable assets by segment:

  

June 30, 2024

 

December 31, 2023

Electronic Instruments

 $835  $843 

Merchant Investment

  24,134   23,530 

Corporate

  17,278   17,477 

Total

 $42,247  $41,850 

 

The Company did not have any capital expenditures as of  June 30, 2024 or  December 31, 2023.

v3.24.2.u1
Note 4 - Investments
6 Months Ended
Jun. 30, 2024
Notes to Financial Statements  
Investments in Debt and Marketable Equity Securities (and Certain Trading Assets) Disclosure [Text Block]

 

4. Investments

 

Marketable Securities

 

Details of marketable securities held as of  June 30, 2024 and  December 31, 2023 are as follows:

  

June 30, 2024

          

Cumulative

          

Unrealized

  

Fair Value

 

Basis

 

(Loss) Gain

Equity securities

 $18  $34  $(16)

Total

 $18  $34  $(16)

 

  

December 31, 2023

          

Cumulative

          

Unrealized

  

Fair Value

 

Basis

 

(Loss) Gain

Equity securities

 $22  $34  $(12)

Total

 $22  $34  $(12)

 

Net Investment Income

 

Net investment income represents income primarily from the following sources:

 

Income earned from investments in money market funds (recorded in Cash and cash equivalents)

 

Dividends received from Marketable securities

 

Income from unconsolidated or equity method investments

 

The following table presents the components of Net investment income:

  

Three Months Ended June 30,

 

Six Months Ended June 30,

  

2024

 

2023

 

2024

 

2023

Interest on cash and cash equivalents

 $538  $275  $1,037  $473 

Net investment income

 $538  $275  $1,037  $473 

 

Net Gains (Losses)

 

Net gains and losses are determined by specific identification. The net realized gains and losses are generated primarily from the following sources:

 

Realized gains and losses from investments in Marketable securities

 

Changes in the fair value of investments in Marketable securities

 

The following table presents the components of Net gains (losses):

  

Three Months Ended June 30,

 

Six Months Ended June 30,

  

2024

 

2023

 

2024

 

2023

Marketable securities

 $(1) $43  $(4) $388 

Net (losses) gains

 $(1) $43  $(4) $388 

 

v3.24.2.u1
Note 5 - Fair Value Measurements
6 Months Ended
Jun. 30, 2024
Notes to Financial Statements  
Fair Value Disclosures [Text Block]

 

5. Fair Value Measurements

 

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Fair value guidance identifies three primary valuation techniques: the market approach, the income approach and the cost approach. The market approach uses prices and other relevant information generated by market transactions involving identical or comparable assets or liabilities. The income approach uses valuation techniques to convert future amounts, such as cash flows or earnings, to a single present amount. The measurement is based on the value indicated by current market expectations about those future amounts. The cost approach is based on the amount that currently would be required to replace the service capacity of an asset.

 

Fair Value Hierarchy

 

The fair value hierarchy prioritizes the inputs to valuation techniques used to measure fair value into three broad levels. The fair value hierarchy gives the highest priority to observable inputs such as quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). The maximization of observable inputs and the minimization of the use of unobservable inputs are required.

 

Classification within the fair value hierarchy is based upon the objectivity of the inputs that are significant to the valuation of an asset or liability as of the measurement date. The three levels within the fair value hierarchy are characterized as follows:

 

Level 1 - Quoted prices (unadjusted) in active markets for identical assets or liabilities that the Company has the ability to access at the measurement date.

 

Level 2 - Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly. Level 2 inputs include: quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets or liabilities in markets that are not active; inputs other than quoted prices that are observable for the asset or liability; and inputs that are derived principally from or corroborated by observable market data by correlation or other means.

 

Level 3 - Unobservable inputs for the asset or liability for which there is little, if any, market activity for the asset or liability at the measurement date. Unobservable inputs reflect the Company's own assumptions about what market participants would use to price the asset or liability. These inputs may include internally developed pricing models, discounted cash flow methodologies as well as instruments for which the fair value determination requires significant management judgment.

 

The following is a description of the valuation methodologies used for instruments carried at fair value. These methodologies are applied to asset and liabilities across the levels discussed above, and the observability of the inputs used determines the appropriate level in the fair value hierarchy for the respective asset or liability.

 

Valuation Methodologies of Financial Instruments Measured at Fair Value

 

Cash and cash equivalents - Money market instruments are measured at cost, which approximates fair values because of the relatively short time to maturity.

 

Equity securities - Whenever available, we obtained quoted prices in active markets for identical assets as of the balance sheet date to measure equity securities. Market price data is generally obtained from exchange or dealer markets.

 

Assets and Liabilities Measured at Fair Value on a Recurring Basis

 

The following table presents information about assets measured at fair value on a recurring basis and indicates the level of the fair value measurement based on the observability of inputs used:

  

June 30, 2024

  

Level 1

 

Level 2

 

Level 3

 

Total

Cash and cash equivalents (a)

 $40,612  $  $  $40,612 

Marketable securities:

                

Equity securities

  18         18 

Total marketable securities

  18         18 

Total

 $40,630  $  $  $40,630 

 

  

December 31, 2023

  

Level 1

 

Level 2

 

Level 3

 

Total

Cash and cash equivalents (a)

 $40,229  $  $  $40,229 

Marketable securities:

                

Equity securities

  22         22 

Total marketable securities

  22         22 

Total

 $40,251  $  $  $40,251 

(a)

As of June 30, 2024 and December 31, 2023, included investments in money market mutual funds managed or advised by GAMCO Investors, Inc.

 

There were no liabilities subject to fair value on a recurring basis as of  June 30, 2024 and December 31, 2023.

 

 

 

Fair Value Measurements on a Non-Recurring Basis

 

The Company has other assets that may be subject to measurement at fair value on a non-recurring basis including goodwill and intangible assets and other long-lived assets. The Company reviews goodwill annually and the carrying value of long-lived assets whenever events and circumstances indicate that the carrying amounts of the assets may not be recoverable. If it is determined that the assets are impaired, the carrying value would be reduced to an estimated recoverable value. The Company's common stock warrants (as defined below) were measured at fair value as disclosed in Note 10 - Stockholders' Equity.

 

As of June 30, 2024 and December 31, 2023, the Company did not write down any assets to fair value.

 

Fair Value Information about Financial Instruments Not Measured at Fair Value

 

As of June 30, 2024 and December 31, 2023, the Company did have any assets or liabilities classified as financial instruments that were not measured at fair value.

 

v3.24.2.u1
Note 6 - Variable Interest Entities
6 Months Ended
Jun. 30, 2024
Notes to Financial Statements  
Variable Interest Entity Disclosure [Text Block]

6. Variable Interest Entities

 

The Company holds variable interests in certain entities in the form of equity investments. The Company consolidates an entity under the variable interest entity ("VIE") guidance when it is determined the Company is the primary beneficiary.

 

The Company has no right to the benefits from, nor does it bear the risk associated with, VIEs beyond the Company's direct equity investments in these entities. If the Company were to liquidate, the assets held by VIEs would not be available to the general creditors of the Company as a result of the liquidation.

 

During June 2023, the Company was appointed as sole managing member of LGL Systems Nevada Management Partners, LLC ("LGL Nevada") and invested approximately $4 into LGL Nevada, representing the Company's 1.0% general partnership interest. Concurrently, Lynch Capital, a wholly owned subsidiary of the Company, invested $1,000 into LGL Systems Acquisition Holding Company, LLC ("LGL Systems"), representing 34.8% of the memberships in LGL Systems, which is controlled by LGL Nevada. As a result, the Company determined it was the primary beneficiary of LGL Systems and was therefore required to consolidate LGL Systems.

 

Consolidated VIEs

 

The Company's only consolidated VIE is LGL Systems.

 

The following table summarizes the assets and liabilities of LGL Systems included in the Condensed Consolidated Balance Sheets:

  

June 30, 2024

 

December 31, 2023

Assets:

        

Current assets:

        

Cash and cash equivalents

 $3,004  $2,932 

Accounts receivable

  14   14 

Total current assets

  3,018   2,946 

Total assets

 $3,018  $2,946 
         

Total liabilities

 $  $ 

 

As of June 30, 2024 and December 31, 2023, the non-controlling interests in LGL Systems was $1,966 and $1,920, respectively. 

 

Unconsolidated VIEs

 

The Company's only unconsolidated VIE is LGL Nevada.

 

We calculate our maximum exposure to loss to be (i) the amount invested in the debt or equity of the VIE and (ii) other commitments and guarantees to the VIE.

  

June 30, 2024

 

December 31, 2023

Total assets

 $595  $588 
         

Maximum exposure to loss:

        

On-balance sheet (a)

  3   3 

Off-balance sheet

      

Total

 $3  $3 

(a)

As of  June 30, 2024 and December 31, 2023, our investment in LGL Nevada was recorded in Other assets in the Condensed Consolidated Balance Sheets.

 

LGL Systems Nevada Management Partners LLC

LGL Nevada was formed in October 2019 for the purpose of performing key management and controls decisions of LGL Systems. The remaining 99.0% of ownership interests are held by four individuals, two of which are members of Company management. In the event LGL Nevada resigns as manager of LGL Systems, it has the sole right to appoint a new manager.

v3.24.2.u1
Note 7 - Related Party Transactions
6 Months Ended
Jun. 30, 2024
Notes to Financial Statements  
Related Party Transactions Disclosure [Text Block]

 

7. Related Party Transactions

 

In the normal course of business, the Company enters into various transactions with affiliated companies. Parties are considered to be related of one party has the ability to control or exercise significant influence over the other party in making financial or operating decisions.

 

The following tables summarize income and expenses from transactions with related parties for the three and six months ended  June 30, 2024 and 2023:

  

Three Months Ended June 30,

  

2024

 

2023

  

Income

 

Expense

 

Income

 

Expense

GAMCO Investors, Inc.

 $441  $  $388  $ 

M-tron Industries, Inc.

     (15)     12 

Total

 $441  $(15) $388  $12 

 

  

Six Months Ended June 30,

  

2024

 

2023

  

Income

 

Expense

 

Income

 

Expense

GAMCO Investors, Inc.

 $849  $  $822  $ 

M-tron Industries, Inc.

     (29)     (4)

Total

 $849  $(29) $822  $(4)

 

The following table summarizes assets and liabilities with related parties as of  June 30, 2024 and  December 31, 2023:

  

June 30, 2024

 

December 31, 2023

  

Assets

 

Liabilities

 

Assets

 

Liabilities

GAMCO Investors, Inc.

 $33,488  $  $32,568  $ 

M-tron Industries, Inc.

     74       

Total

 $33,488  $74  $32,568  $ 

 

The material agreements whereby the Company generates revenues and expenses with affiliated entities are discussed below:

 

Investment Activity with GAMCO Investors, Inc.

 

Certain balances held and invested in various mutual funds are managed or advised by GAMCO Investors, Inc. or one of its subsidiaries (collectively, "GAMCO" or the "Fund Manager"), which is related to the Company through certain of our shareholders. All investments, including those in related party mutual funds, are overseen by the independent Investment Committee of the Board of Directors (the "Investment Committee"). The Investment Committee meets regularly to review the alternatives and has determined the current investments most reflect the Company's objective of lower cost, market return and adherence to having a larger proportion of underlying investments directly in United States Treasuries. For the three months ended  June 30, 2024 and 2023, the Company paid the Fund Manager a fund management fee of approximately 8 basis points per annum of the asset balances under management. For the six months ended  June 30, 2024 and 2023, the Company paid the Fund Manager a fund management fee of approximately 8 basis points and 14 basis points per annum, respectively, of the asset balances under management. All fund management fees are not paid directly by the Company and are deducted prior to a fund striking its net asset value ("NAV").

 

As of June 30, 2024, the balance managed by the Fund Manager totaled $33,488, all of which was classified within Cash and cash equivalents on the Condensed Consolidated Balance Sheets. As of December 31, 2023, the balance managed by the Fund Manager totaled $32,568, all of which was classified within Cash and cash equivalents on the Condensed Consolidated Balance Sheets.

 

For the three months ended June 30, 2024, the Company earned income on its investments managed by the Fund Manager totaling $441, all of which was included in Net investment income on the Condensed Consolidated Statements of Operations. For the three months ended June 30, 2023, the Company earned income on its investments managed by the Fund Manager totaling $388, of which $331 was included in Net investment income and $57 was included in Net (losses) gains on the Condensed Consolidated Statements of Operations.

 

For the six months ended June 30, 2024, the Company earned income on its investments managed by the Fund Manager totaling $849, all of which was included in Net investment income on the Condensed Consolidated Statements of Operations. For the six months ended June 30, 2023, the Company earned income on its investments managed by the Fund Manager totaling $822, of which $452 was included in Net investment income and $370 was included in Net (losses) gains on the Condensed Consolidated Statements of Operations.

 

 

 

Transactions with M-tron Industries, Inc.

 

Transitional Administrative and Management Services Agreement

On October 7, 2022, the separation of the M-tron Industries, Inc. ("MtronPTI") business from the Company was completed (the "Separation") and the business became an independent, publicly traded company trading on the NYSE American under the stock symbol "MPTI." The Separation was completed through the Company's distribution (the "Distribution") of 100% of the shares of MtronPTI's common stock to holders of the Company's common stock as of the close of business on September 30, 2022, the record date for the Distribution.

 

LGL Group and MtronPTI entered into an Amended and Restated Transitional Administrative and Management Services Agreement ("MtronPTI TSA"), which sets out the terms for services to be provided between the two companies post-separation. The current terms result in a net monthly payment of $4 per month to MtronPTI.

 

For the three months ended June 30, 2024 and 2023, the Company paid MtronPTI $12 under the terms of the MtronPTI TSA, which were recorded in Engineering, selling and administrative on the Condensed Consolidated Statements of Operations. For the six months ended June 30, 2024 and 2023, the Company paid MtronPTI $24, respectively, under the terms of the MtronPTI TSA, which were recorded in Engineering, selling and administrative on the Condensed Consolidated Statements of Operations.

 

Tax Indemnity and Sharing Agreement

LGL Group and MtronPTI entered into a Tax Indemnity and Sharing Agreement ("MtronPTI Tax Agreement"), which sets out the terms for which party would be responsible for taxes imposed on the Company if the distribution, together with certain related transactions, were to fail to qualify as a tax-free transaction under Internal Revenue Code ("IRC") Sections 355 and 368(a)(1)(D) if such failure were the result of actions taken after the Distribution by the Company or MtronPTI.

 

For the three and six months ended June 30, 2024 and 2023, no taxes related to the Distribution have been recorded in the Condensed Consolidated Financial Statements.

 

Other Transactions

LGL Group and MtronPTI have agreed to share salaries and benefits related to certain employees incurred by the Company. For the three and six months ended June 30, 2024, MtronPTI reimbursed the Company $27 and $53, respectively, of the salaries and benefits of certain employees, which represents 50% of those costs and were recorded as a reduction to Engineering, selling and administrative on the Condensed Consolidated Statements of Operations.

 

LGL Group and MtronPTI agreed to share any excess Separation costs. Included in discontinued operations is $28, which represents 50% of the excess Separation costs incurred for six months ended June 30, 2023.

 

v3.24.2.u1
Note 8 - Income Taxes
6 Months Ended
Jun. 30, 2024
Notes to Financial Statements  
Income Tax Disclosure [Text Block]

8. Income Taxes

 

The Company’s quarterly provision for income taxes is measured using an annual effective tax rate, adjusted for discrete items within the period presented. To determine the annual effective tax rate, the Company estimates both the total income (loss) before income taxes for the full year and the jurisdictions in which that income (loss) is subject to tax. The actual effective tax rate for the full year may differ from these estimates if income (loss) before income taxes is greater than or less than what was estimated or if the allocation of income (loss) to jurisdictions in which it is taxed is different from the estimated allocations.

 

The Company's effective tax rates on continuing operations for the three and six months ended June 30, 2024 were 32.1% and 35.4%, respectively. The Company's effective tax rates on continuing operations for the three and six months ended June 30, 2023 were -1.5% and 70.0%, respectively. The effective tax rates differed from the statutory tax rate of 21% primarily due to the impact of uncertain tax positions and state income taxes.

 

v3.24.2.u1
Note 9 - Stock-Based Compensation
6 Months Ended
Jun. 30, 2024
Notes to Financial Statements  
Share-Based Payment Arrangement [Text Block]

9. Stock-Based Compensation

 

Under the Company’s 2021 Incentive Plan (the "Plan"), and the prior 2011 Incentive Plan, as amended, stock-based compensation may be issued to employees and non-employee directors. As of June 30, 2024, 955,070 shares remained available for future issuance under the Plan.

 

The following table summarizes stock-based compensation expense, which includes expenses related to awards granted under the Plan for the periods indicated:

  

Three Months Ended June 30,

 

Six Months Ended June 30,

  

2024

 

2023

 

2024

 

2023

Restricted stock awards

 $9  $  $18  $ 

Total

 $9  $  $18  $ 

 

 

 

Restricted Stock Awards

 

The following table summarizes restricted stock awards activity for the period indicated:

  

Number of Shares

 

Weighted Average Grant Date Fair Value

 

Aggregate Grant Date Fair Value

Balance as of December 31, 2023

  20,118  $5.22  $105 

Granted

         

Vested

         

Canceled

         

Balance as of June 30, 2024

  20,118  $5.22  $105 

 

v3.24.2.u1
Note 10 - Stockholders' Equity
6 Months Ended
Jun. 30, 2024
Notes to Financial Statements  
Equity [Text Block]

10. Stockholders' Equity

 

Shares Outstanding

 

The following table presents a rollforward of outstanding shares for the periods indicated:

  

Six Months Ended June 30, 2024

 

Year Ended December 31, 2023

  

Common Stock Issued

 

Held in Treasury

 

Common Stock Outstanding

 

Common Stock Issued

 

Held in Treasury

 

Common Stock Outstanding

Shares, beginning of year

  5,454,639   (81,584)  5,373,055   5,434,521   (81,584)  5,352,937 

Stock-based compensation

           20,118      20,118 

Shares, end of period

  5,454,639   (81,584)  5,373,055   5,454,639   (81,584)  5,373,055 

 

v3.24.2.u1
Note 11 - Earnings Per Share ("EPS")
6 Months Ended
Jun. 30, 2024
Notes to Financial Statements  
Earnings Per Share [Text Block]

11. Earnings Per Share ("EPS")

 

The following table presents a reconciliation of Net income (loss) and shares used in calculating basis and diluted net income (loss) per common share for the periods indicated:

  

Three Months Ended June 30,

 

Six Months Ended June 30,

  

2024

 

2023

 

2024

 

2023

Numerator for EPS:

                

Income (loss) from continuing operations

 $161  $(130) $204  $55 

Less: Net income from continuing operations attributable to non-controlling interests

  24      46    

Income (loss) attributable to LGL Group common shareholders from continuing operations

  137   (130)  158   55 

Income (loss) from discontinued operations, net of tax

           (28)

Net income (loss) attributable to LGL Group common stockholders

 $137  $(130) $158  $27 
                 

Denominator for EPS:

                

Weighted average common shares outstanding - basic

  5,352,937   5,352,937   5,352,937   5,352,937 

Dilutive effects (a):

                

Warrants

  125,178      190,399    

Restricted stock

  4,428      5,533    

Weighted average common shares outstanding - diluted

  5,482,543   5,352,937   5,548,869   5,352,937 
                 

Income per common share attributable to LGL Group common stockholders:

                

Basic (b):

                

Income (loss) from continuing operations

 $0.03  $(0.02) $0.03  $0.01 

Income (loss) from discontinued operations

           (0.01)

Net income (loss) attributable to LGL Group common stockholders

 $0.03  $(0.02) $0.03  $0.01 
                 

Diluted (b):

                

Income (loss) from continuing operations

 $0.02  $(0.02) $0.03  $0.01 

Income (loss) from discontinued operations

           (0.01)

Net income (loss) attributable to LGL Group common stockholders

 $0.02  $(0.02) $0.03  $0.01 

(a)

For the three and six months ended June 30, 2023, weighted average shares used for calculating earnings per share excludes warrants to purchase 1,051,664 shares of common stock.

(b)

Basic and diluted earnings per share are calculated using actual, unrounded amounts. Therefore, the components of earnings per share may not sum to its corresponding total.

v3.24.2.u1
Note 12 - Contingencies
6 Months Ended
Jun. 30, 2024
Notes to Financial Statements  
Commitments and Contingencies Disclosure [Text Block]

 

12. Contingencies

 

In the normal course of business, the Company and its subsidiaries may become defendants in certain product liability, patent infringement, worker claims and other litigation. The Company records a liability when it is probable that a loss has been incurred and the amount is reasonably estimable. The Company is not involved in any legal proceedings other than routine litigation arising in the normal course of business, none of which the Company believes will have a material adverse effect on the Company's business, financial condition or results of operations.

 

v3.24.2.u1
Note 13 - Other Financial Statement Information
6 Months Ended
Jun. 30, 2024
Notes to Financial Statements  
Supplemental Balance Sheet Disclosures [Text Block]

13. Other Financial Statement Information

 

Inventories, Net

 

The Company reduces the value of its inventories to net realizable value when the net realizable value is believed to be less than the cost of the item.

 

The components of inventory as of  June 30, 2024 and  December 31, 2023 are summarized below:

  

June 30, 2024

 

December 31, 2023

Raw materials

 $363  $271 

Work in process

  54   9 

Finished goods

  3    

Total gross inventory

  420   280 

Reserve for excess and obsolete inventory

  (84)  (76)

Inventories, net

 $336  $204 

 

Intangible Assets, Net

 

The components of intangible assets as of  June 30, 2024 and  December 31, 2023 are summarized below:

  

June 30, 2024

 

December 31, 2023

Intellectual property

 $214  $214 

Gross intangible assets

  214   214 

Less: Accumulated amortization

  (168)  (157)

Intangible assets, net

 $46  $57 

 

v3.24.2.u1
Note 14 - Domestic and Foreign Revenues
6 Months Ended
Jun. 30, 2024
Notes to Financial Statements  
Revenue from Contract with Customer [Text Block]

14. Domestic and Foreign Revenues

 

Significant foreign revenues from operations (10% or more of foreign sales) were as follows:

  

Three Months Ended June 30,

 

Six Months Ended June 30,

  

2024

 

2023

 

2024

 

2023

Spain

 $56  $236  $104  $236 

India

  15      99   23 

Romania

        94    

Australia

  87   5   87   5 

Canada

  11   47   12   90 

All other foreign countries

  15   46   47   57 

Total foreign revenues

 $184  $334  $443  $411 

Total domestic revenue

 $347  $69  $480  $433 

 

The Company allocates its foreign revenue based on the customer's ship-to location.

 

v3.24.2.u1
Note 15 - Subsequent Events
6 Months Ended
Jun. 30, 2024
Notes to Financial Statements  
Subsequent Events [Text Block]

15. Subsequent Events

 

The Company has evaluated events and transactions that occurred after the balance sheet data through the date that the Condensed Consolidated Financial Statements were issued. Based upon this review, the Company did not identify any subsequent events that would have required adjustment or disclosure in the Condensed Consolidated Financial Statements.

 

v3.24.2.u1
Insider Trading Arrangements
3 Months Ended 6 Months Ended
Jun. 30, 2024
Jun. 30, 2024
Insider Trading Arr Line Items    
Material Terms of Trading Arrangement [Text Block]  

Item 5.

Other Information

 

During the three months ended  June 30, 2024none of our directors or officers, as defined in Section 16 of the Exchange Act, adopted or terminated a "Rule 10b5-1 trading arrangement" or a "non-Rule 10b5-1 trading arrangement," as each term is defined in Item 408 of Regulation S-K of the Exchange Act.

Rule 10b5-1 Arrangement Terminated [Flag] false  
Rule 10b5-1 Arrangement Adopted [Flag] false  
Non-Rule 10b5-1 Arrangement Terminated [Flag] false  
Non-Rule 10b5-1 Arrangement Adopted [Flag] false  
v3.24.2.u1
Significant Accounting Policies (Policies)
6 Months Ended
Jun. 30, 2024
Accounting Policies [Abstract]  
Use of Estimates, Policy [Policy Text Block]

Use of Estimates

 

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates.

 

Impairment or Disposal of Long-Lived Assets, Policy [Policy Text Block]

Impairment of Long-Lived Assets

 

Long-lived assets, including intangible assets subject to amortization, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of the asset may not be recoverable. Long-lived assets are grouped with other assets to the lowest level to which identifiable cash flows are largely independent of the cash flows of other groups of assets and liabilities. Management assesses the recoverability of the carrying cost of the assets based on a review of projected undiscounted cash flows. If an asset is held for sale, management reviews its estimated fair value less cost to sell. Fair value is determined using pertinent market information, including appraisals or broker's estimates, and/or projected discounted cash flows. In the event an impairment loss is identified, it is recognized based on the amount by which the carrying value exceeds the estimated fair value of the long-lived asset.

 

We performed an assessment to determine if there were any indicators of impairment as a result of the operating conditions resulting as of the periods ended  June 30, 2024 and December 31, 2023. We concluded that, while there were events and circumstances in the macro-environment that did impact us, we did not experience any entity-specific indicators of asset impairment and no triggering events occurred.

 

 

New Accounting Pronouncements, Policy [Policy Text Block]

Future Application of Accounting Standards

 

Segment Reporting

In November 2023, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2023-07, "Segment Reporting (Topic 280) - Improvements to Reportable Segment Disclosures" ("ASU 2023-07"), to address improvements to reportable segment disclosures. The standard primarily requires the following disclosure on an annual and interim basis: (i) significant segment expenses that are regularly provided to chief operating decision maker ("CODM") and included within each reported measure of segment profit or loss; and (ii) other segment items and description of its composition. The standard also requires current annual disclosures about a reportable segment's profits or losses and assets to be disclosed in interim periods and the title and position of the CODM with an explanation of how the CODM uses the report measure(s) of segment profits or losses in assessing segment performance. The provisions of the standard are effective for public companies for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024, with early adoption permitted. The standard is applied retrospectively to all prior periods presented. We are assessing the impact of this standard.

 

Income Taxes

In December 2023, the FASB issued ASU 2023-09, "Income Taxes (Topic 740) - Improvements to Income Tax Disclosures" ("ASU 2023-09"). The standard requires disaggregated information about a company's effective tax rate reconciliation as well as information on income taxes paid. The provisions of the standard are effective for public companies for fiscal years beginning after December 15, 2024, with early adoption permitted. This standard applies prospectively; however, retrospective application is permitted. We are assessing the impact of this standard.

v3.24.2.u1
Note 3 - Segment Information (Tables)
6 Months Ended
Jun. 30, 2024
Notes Tables  
Schedule of Segment Reporting Information, by Segment [Table Text Block]
  

Three Months Ended June 30, 2024

  

Electronic Instruments

 

Merchant Investment

 

Corporate

 

Consolidated

Revenues:

                

Net sales

 $531  $  $  $531 

Net investment income

     315   223   538 

Net (losses) gains

        (1)  (1)

Total revenues

  531   315   222   1,068 

Expenses:

                

Manufacturing cost of sales

  214         214 

Engineering, selling and administrative

  243   78   296   617 

Total expenses

  457   78   296   831 

Income (loss) from continuing operations before income taxes

  74   237   (74)  237 

Income tax expense

        76   76 

Net income (loss) from continuing operations

  74   237   (150)  161 

Income (loss) from discontinued operations, net of tax

            

Net income (loss)

  74   237   (150)  161 

Less: Net income attributable to non-controlling interests

     24      24 

Net income (loss) attributable to LGL Group common stockholders

 $74  $213  $(150) $137 
  

Three Months Ended June 30, 2023

  

Electronic Instruments

 

Merchant Investment

 

Corporate

 

Consolidated

Revenues:

                

Net sales

 $403  $  $  $403 

Net investment income

        275   275 

Net (losses) gains

        43   43 

Total revenues

  403      318   721 

Expenses:

                

Manufacturing cost of sales

  208         208 

Engineering, selling and administrative

  173      472   645 

Total expenses

  381      472   853 

Income (loss) from continuing operations before income taxes

  22      (154)  (132)

Income tax expense (benefit)

        (2)  (2)

Net income (loss) from continuing operations

  22      (152)  (130)

Income (loss) from discontinued operations, net of tax

            

Net income (loss)

  22      (152)  (130)

Less: Net income attributable to non-controlling interests

            

Net income (loss) attributable to LGL Group common stockholders

 $22  $  $(152) $(130)
  

Six Months Ended June 30, 2024

  

Electronic Instruments

 

Merchant Investment

 

Corporate

 

Consolidated

Revenues:

                

Net sales

 $923  $  $  $923 

Net investment income

     604   433   1,037 

Net (losses) gains

        (4)  (4)

Total revenues

  923   604   429   1,956 

Expenses:

                

Manufacturing cost of sales

  418         418 

Engineering, selling and administrative

  429   127   666   1,222 

Total expenses

  847   127   666   1,640 

Income (loss) from continuing operations before income taxes

  76   477   (237)  316 

Income tax expense

        112   112 

Net income (loss) from continuing operations

  76   477   (349)  204 

Income (loss) from discontinued operations, net of tax

            

Net income (loss)

  76   477   (349)  204 

Less: Net income attributable to non-controlling interests

     46      46 

Net income (loss) attributable to LGL Group common stockholders

 $76  $431  $(349) $158 
  

Six Months Ended June 30, 2023

  

Electronic Instruments

 

Merchant Investment

 

Corporate

 

Consolidated

Revenues:

                

Net sales

 $844  $  $  $844 

Net investment income

        473   473 

Net (losses) gains

        388   388 

Total revenues

  844      861   1,705 

Expenses:

                

Manufacturing cost of sales

  400         400 

Engineering, selling and administrative

  350      837   1,187 

Total expenses

  750      837   1,587 

Income (loss) from continuing operations before income taxes

  94      24   118 

Income tax expense

        63   63 

Net income (loss) from continuing operations

  94      (39)  55 

Income (loss) from discontinued operations, net of tax

        (28)  (28)

Net income (loss)

  94      (67)  27 

Less: Net income attributable to non-controlling interests

            

Net income (loss) attributable to LGL Group common stockholders

 $94  $  $(67) $27 
Reconciliation of Assets from Segment to Consolidated [Table Text Block]
  

June 30, 2024

 

December 31, 2023

Electronic Instruments

 $835  $843 

Merchant Investment

  24,134   23,530 

Corporate

  17,278   17,477 

Total

 $42,247  $41,850 
v3.24.2.u1
Note 4 - Investments (Tables)
6 Months Ended
Jun. 30, 2024
Notes Tables  
Marketable Securities [Table Text Block]
  

June 30, 2024

          

Cumulative

          

Unrealized

  

Fair Value

 

Basis

 

(Loss) Gain

Equity securities

 $18  $34  $(16)

Total

 $18  $34  $(16)
  

December 31, 2023

          

Cumulative

          

Unrealized

  

Fair Value

 

Basis

 

(Loss) Gain

Equity securities

 $22  $34  $(12)

Total

 $22  $34  $(12)
Investment Income [Table Text Block]
  

Three Months Ended June 30,

 

Six Months Ended June 30,

  

2024

 

2023

 

2024

 

2023

Interest on cash and cash equivalents

 $538  $275  $1,037  $473 

Net investment income

 $538  $275  $1,037  $473 
Gain (Loss) on Securities [Table Text Block]
  

Three Months Ended June 30,

 

Six Months Ended June 30,

  

2024

 

2023

 

2024

 

2023

Marketable securities

 $(1) $43  $(4) $388 

Net (losses) gains

 $(1) $43  $(4) $388 

 

v3.24.2.u1
Note 5 - Fair Value Measurements (Tables)
6 Months Ended
Jun. 30, 2024
Notes Tables  
Fair Value, Assets Measured on Recurring Basis [Table Text Block]
  

June 30, 2024

  

Level 1

 

Level 2

 

Level 3

 

Total

Cash and cash equivalents (a)

 $40,612  $  $  $40,612 

Marketable securities:

                

Equity securities

  18         18 

Total marketable securities

  18         18 

Total

 $40,630  $  $  $40,630 
  

December 31, 2023

  

Level 1

 

Level 2

 

Level 3

 

Total

Cash and cash equivalents (a)

 $40,229  $  $  $40,229 

Marketable securities:

                

Equity securities

  22         22 

Total marketable securities

  22         22 

Total

 $40,251  $  $  $40,251 
v3.24.2.u1
Note 6 - Variable Interest Entities (Tables)
6 Months Ended
Jun. 30, 2024
Notes Tables  
Schedule of Variable Interest Entities [Table Text Block]
  

June 30, 2024

 

December 31, 2023

Assets:

        

Current assets:

        

Cash and cash equivalents

 $3,004  $2,932 

Accounts receivable

  14   14 

Total current assets

  3,018   2,946 

Total assets

 $3,018  $2,946 
         

Total liabilities

 $  $ 
  

June 30, 2024

 

December 31, 2023

Total assets

 $595  $588 
         

Maximum exposure to loss:

        

On-balance sheet (a)

  3   3 

Off-balance sheet

      

Total

 $3  $3 
v3.24.2.u1
Note 7 - Related Party Transactions (Tables)
6 Months Ended
Jun. 30, 2024
Notes Tables  
Schedule of Related Party Transactions [Table Text Block]
  

Three Months Ended June 30,

  

2024

 

2023

  

Income

 

Expense

 

Income

 

Expense

GAMCO Investors, Inc.

 $441  $  $388  $ 

M-tron Industries, Inc.

     (15)     12 

Total

 $441  $(15) $388  $12 
  

Six Months Ended June 30,

  

2024

 

2023

  

Income

 

Expense

 

Income

 

Expense

GAMCO Investors, Inc.

 $849  $  $822  $ 

M-tron Industries, Inc.

     (29)     (4)

Total

 $849  $(29) $822  $(4)
  

June 30, 2024

 

December 31, 2023

  

Assets

 

Liabilities

 

Assets

 

Liabilities

GAMCO Investors, Inc.

 $33,488  $  $32,568  $ 

M-tron Industries, Inc.

     74       

Total

 $33,488  $74  $32,568  $ 
v3.24.2.u1
Note 9 - Stock-Based Compensation (Tables)
6 Months Ended
Jun. 30, 2024
Notes Tables  
Share-Based Payment Arrangement, Expensed and Capitalized, Amount [Table Text Block]
  

Three Months Ended June 30,

 

Six Months Ended June 30,

  

2024

 

2023

 

2024

 

2023

Restricted stock awards

 $9  $  $18  $ 

Total

 $9  $  $18  $ 
Share-Based Payment Arrangement, Restricted Stock Unit, Activity [Table Text Block]
  

Number of Shares

 

Weighted Average Grant Date Fair Value

 

Aggregate Grant Date Fair Value

Balance as of December 31, 2023

  20,118  $5.22  $105 

Granted

         

Vested

         

Canceled

         

Balance as of June 30, 2024

  20,118  $5.22  $105 
v3.24.2.u1
Note 10 - Stockholders' Equity (Tables)
6 Months Ended
Jun. 30, 2024
Notes Tables  
Schedule of Common Stock Outstanding Roll Forward [Table Text Block]
  

Six Months Ended June 30, 2024

 

Year Ended December 31, 2023

  

Common Stock Issued

 

Held in Treasury

 

Common Stock Outstanding

 

Common Stock Issued

 

Held in Treasury

 

Common Stock Outstanding

Shares, beginning of year

  5,454,639   (81,584)  5,373,055   5,434,521   (81,584)  5,352,937 

Stock-based compensation

           20,118      20,118 

Shares, end of period

  5,454,639   (81,584)  5,373,055   5,454,639   (81,584)  5,373,055 
v3.24.2.u1
Note 11 - Earnings Per Share ("EPS") (Tables)
6 Months Ended
Jun. 30, 2024
Notes Tables  
Schedule of Weighted Average Number of Shares [Table Text Block]
  

Three Months Ended June 30,

 

Six Months Ended June 30,

  

2024

 

2023

 

2024

 

2023

Numerator for EPS:

                

Income (loss) from continuing operations

 $161  $(130) $204  $55 

Less: Net income from continuing operations attributable to non-controlling interests

  24      46    

Income (loss) attributable to LGL Group common shareholders from continuing operations

  137   (130)  158   55 

Income (loss) from discontinued operations, net of tax

           (28)

Net income (loss) attributable to LGL Group common stockholders

 $137  $(130) $158  $27 
                 

Denominator for EPS:

                

Weighted average common shares outstanding - basic

  5,352,937   5,352,937   5,352,937   5,352,937 

Dilutive effects (a):

                

Warrants

  125,178      190,399    

Restricted stock

  4,428      5,533    

Weighted average common shares outstanding - diluted

  5,482,543   5,352,937   5,548,869   5,352,937 
                 

Income per common share attributable to LGL Group common stockholders:

                

Basic (b):

                

Income (loss) from continuing operations

 $0.03  $(0.02) $0.03  $0.01 

Income (loss) from discontinued operations

           (0.01)

Net income (loss) attributable to LGL Group common stockholders

 $0.03  $(0.02) $0.03  $0.01 
                 

Diluted (b):

                

Income (loss) from continuing operations

 $0.02  $(0.02) $0.03  $0.01 

Income (loss) from discontinued operations

           (0.01)

Net income (loss) attributable to LGL Group common stockholders

 $0.02  $(0.02) $0.03  $0.01 
v3.24.2.u1
Note 13 - Other Financial Statement Information (Tables)
6 Months Ended
Jun. 30, 2024
Notes Tables  
Schedule of Inventory, Current [Table Text Block]
  

June 30, 2024

 

December 31, 2023

Raw materials

 $363  $271 

Work in process

  54   9 

Finished goods

  3    

Total gross inventory

  420   280 

Reserve for excess and obsolete inventory

  (84)  (76)

Inventories, net

 $336  $204 
Schedule of Finite-Lived Intangible Assets [Table Text Block]
  

June 30, 2024

 

December 31, 2023

Intellectual property

 $214  $214 

Gross intangible assets

  214   214 

Less: Accumulated amortization

  (168)  (157)

Intangible assets, net

 $46  $57 
v3.24.2.u1
Note 14 - Domestic and Foreign Revenues (Tables)
6 Months Ended
Jun. 30, 2024
Notes Tables  
Schedule of Revenue from External Customers Attributed to Foreign Countries by Geographic Area [Table Text Block]
  

Three Months Ended June 30,

 

Six Months Ended June 30,

  

2024

 

2023

 

2024

 

2023

Spain

 $56  $236  $104  $236 

India

  15      99   23 

Romania

        94    

Australia

  87   5   87   5 

Canada

  11   47   12   90 

All other foreign countries

  15   46   47   57 

Total foreign revenues

 $184  $334  $443  $411 

Total domestic revenue

 $347  $69  $480  $433 
v3.24.2.u1
Note 3 - Segment Information (Details Textual)
$ in Thousands
6 Months Ended 12 Months Ended
Jun. 30, 2024
USD ($)
Dec. 31, 2023
USD ($)
Number of Reportable Segments 2  
Segment, Expenditure, Addition to Long-Lived Assets $ 0 $ 0
v3.24.2.u1
Note 3 - Segment Information - Schedule of Segment Reporting Information (Details) - USD ($)
$ in Thousands
3 Months Ended 6 Months Ended
Jun. 30, 2024
Jun. 30, 2023
Jun. 30, 2024
Jun. 30, 2023
Revenues:        
Net sales $ 531 $ 403 $ 923 $ 844
Net investment income 538 275 1,037 473
Net (losses) gains (1) 43 (4) 388
Total revenues 1,068 721 1,956 1,705
Expenses:        
Manufacturing cost of sales 214 208 418 400
Engineering, selling and administrative 617 645 1,222 1,187
Total expenses 831 853 1,640 1,587
Income (loss) from continuing operations before income taxes 237 (132) 316 118
Income tax (benefit) expense 76 (2) 112 63
Net income (loss) from continuing operations 161 (130) 204 55
Income (loss) from discontinued operations, net of tax 0 0 0 (28)
Net income attributable to LGL Group or non-controlling interests 161 (130) 204 27
Less: Net income attributable to non-controlling interests 24 0 46 0
Net income (loss) attributable to LGL Group common stockholders 137 (130) 158 27
Operating Segments [Member] | Electronic Instruments [Member]        
Revenues:        
Net sales 531 403 923 844
Net investment income 0 0 0 0
Net (losses) gains 0 0 0 0
Total revenues 531 403 923 844
Expenses:        
Manufacturing cost of sales 214 208 418 400
Engineering, selling and administrative 243 173 429 350
Total expenses 457 381 847 750
Income (loss) from continuing operations before income taxes 74 22 76 94
Income tax (benefit) expense 0 0 0 0
Net income (loss) from continuing operations 74 22 76 94
Income (loss) from discontinued operations, net of tax 0 0 0 0
Net income attributable to LGL Group or non-controlling interests 74 22 76 94
Less: Net income attributable to non-controlling interests 0 0 0 0
Net income (loss) attributable to LGL Group common stockholders 74 22 76 94
Operating Segments [Member] | Merchant Investment [Member]        
Revenues:        
Net sales 0 0 0 0
Net investment income 315 0 604 0
Net (losses) gains 0 0 0 0
Total revenues 315 0 604 0
Expenses:        
Manufacturing cost of sales 0 0 0 0
Engineering, selling and administrative 78 0 127 0
Total expenses 78 0 127 0
Income (loss) from continuing operations before income taxes 237 0 477 0
Income tax (benefit) expense 0 0 0 0
Net income (loss) from continuing operations 237 0 477 0
Income (loss) from discontinued operations, net of tax 0 0 0 0
Net income attributable to LGL Group or non-controlling interests 237 0 477 0
Less: Net income attributable to non-controlling interests 24 0 46 0
Net income (loss) attributable to LGL Group common stockholders 213 0 431 0
Segment Reporting, Reconciling Item, Corporate Nonsegment [Member]        
Revenues:        
Net sales 0 0 0 0
Net investment income 223 275 433 473
Net (losses) gains (1) 43 (4) 388
Total revenues 222 318 429 861
Expenses:        
Manufacturing cost of sales 0 0 0 0
Engineering, selling and administrative 296 472 666 837
Total expenses 296 472 666 837
Income (loss) from continuing operations before income taxes (74) (154) (237) 24
Income tax (benefit) expense 76 (2) 112 63
Net income (loss) from continuing operations (150) (152) (349) (39)
Income (loss) from discontinued operations, net of tax 0 0 0 (28)
Net income attributable to LGL Group or non-controlling interests (150) (152) (349) (67)
Less: Net income attributable to non-controlling interests 0 0 0 0
Net income (loss) attributable to LGL Group common stockholders $ (150) $ (152) $ (349) $ (67)
v3.24.2.u1
Note 3 - Segment Information - Assets and Capital Expenditures (Details) - USD ($)
$ in Thousands
Jun. 30, 2024
Dec. 31, 2023
Assets $ 42,247 $ 41,850
Operating Segments [Member] | Electronic Instruments [Member]    
Assets 835 843
Operating Segments [Member] | Merchant Investment [Member]    
Assets 24,134 23,530
Segment Reporting, Reconciling Item, Corporate Nonsegment [Member]    
Assets $ 17,278 $ 17,477
v3.24.2.u1
Note 4 - Investments - Details of Marketable Securities (Details) - USD ($)
$ in Thousands
6 Months Ended 12 Months Ended
Jun. 30, 2024
Dec. 31, 2023
Fair value $ 18 $ 22
Basis 34 34
Cumulative unrealized (loss) gain (16) (12)
Equity Securities [Member]    
Fair value 18 22
Basis 34 34
Cumulative unrealized (loss) gain $ (16) $ (12)
v3.24.2.u1
Note 4 - Investments - Net Investment Income (Details) - USD ($)
$ in Thousands
3 Months Ended 6 Months Ended
Jun. 30, 2024
Jun. 30, 2023
Jun. 30, 2024
Jun. 30, 2023
Interest on cash and cash equivalents $ 538 $ 275 $ 1,037 $ 473
Net investment income $ 538 $ 275 $ 1,037 $ 473
v3.24.2.u1
Note 4 - Investments - Net Gain (Losses) (Details) - USD ($)
$ in Thousands
3 Months Ended 6 Months Ended
Jun. 30, 2024
Jun. 30, 2023
Jun. 30, 2024
Jun. 30, 2023
Marketable securities $ (1) $ 43 $ (4) $ 388
Net (losses) gains $ (1) $ 43 $ (4) $ 388
v3.24.2.u1
Note 5 - Fair Value Measurements (Details Textual) - USD ($)
$ in Thousands
6 Months Ended 12 Months Ended
Jun. 30, 2024
Dec. 31, 2023
Asset Impairment Charges $ 0 $ 0
Fair Value, Recurring [Member]    
Liabilities, Fair Value Disclosure $ 0 $ 0
v3.24.2.u1
Note 5 - Fair Value Measurements - Assets Measured at Fair Value on Recurring Basis (Details) - Fair Value, Recurring [Member] - USD ($)
$ in Thousands
Jun. 30, 2024
Dec. 31, 2023
Assets, Fair Value Disclosure $ 40,630 $ 40,251
Cash and Cash Equivalents [Member]    
Assets, Fair Value Disclosure [1] 40,612 40,229
Equity Securities [Member]    
Assets, Fair Value Disclosure 18 22
Marketable Securities [Member]    
Assets, Fair Value Disclosure 18 22
Fair Value, Inputs, Level 1 [Member]    
Assets, Fair Value Disclosure 40,630 40,251
Fair Value, Inputs, Level 1 [Member] | Cash and Cash Equivalents [Member]    
Assets, Fair Value Disclosure [1] 40,612 40,229
Fair Value, Inputs, Level 1 [Member] | Equity Securities [Member]    
Assets, Fair Value Disclosure 18 22
Fair Value, Inputs, Level 1 [Member] | Marketable Securities [Member]    
Assets, Fair Value Disclosure 18 22
Fair Value, Inputs, Level 2 [Member]    
Assets, Fair Value Disclosure [1] 0 0
Fair Value, Inputs, Level 3 [Member]    
Assets, Fair Value Disclosure [1] $ 0 $ 0
[1] As of June 30, 2024 and December 31, 2023, included investments in money market mutual funds managed or advised by GAMCO Investors, Inc.
v3.24.2.u1
Note 6 - Variable Interest Entities (Details Textual) - USD ($)
$ in Thousands
1 Months Ended
Jun. 30, 2023
Jun. 30, 2024
Dec. 31, 2023
Oct. 31, 2019
Equity, Attributable to Noncontrolling Interest   $ 1,966 $ 1,920  
LGL System [Member]        
Subsidiary, Ownership Percentage, Noncontrolling Owner       99.00%
LGL System [Member]        
Equity, Attributable to Noncontrolling Interest   $ 1,966 $ 1,920  
Lynch Capital [Member] | LGL Nevada [Member]        
Payments to Acquire Interest in Subsidiaries and Affiliates $ 4      
Variable Interest Entity, Qualitative or Quantitative Information, Ownership Percentage 1.00%      
Lynch Capital [Member] | LGL System [Member]        
Payments to Acquire Interest in Subsidiaries and Affiliates $ 1,000      
Variable Interest Entity, Qualitative or Quantitative Information, Ownership Percentage 34.80%      
v3.24.2.u1
Note 6 - Variable Interest Entities - VIEs (Details) - USD ($)
$ in Thousands
Jun. 30, 2024
Dec. 31, 2023
Cash and cash equivalents $ 41,074 $ 40,711
Accounts receivable, net of reserves of $52 and $58, respectively 339 356
Total current assets 42,003 41,566
Total assets 42,247 41,850
Total liabilities 1,343 1,168
Variable Interest Entity, Not Primary Beneficiary [Member]    
Total assets 595 588
On-balance sheet (a) [1] 3 3
Off-balance sheet 0 0
Total 3 3
Variable Interest Entity, Primary Beneficiary [Member]    
Cash and cash equivalents 3,004 2,932
Accounts receivable, net of reserves of $52 and $58, respectively 14 14
Total current assets 3,018 2,946
Total assets 3,018 2,946
Total liabilities $ 0 $ 0
[1] As of June 30, 2024 and December 31, 2023, our investment in LGL Nevada was recorded in Other assets in the Condensed Consolidated Balance Sheets.
v3.24.2.u1
Note 7 - Related Party Transactions (Details Textual) - USD ($)
$ in Thousands
3 Months Ended 6 Months Ended
Jun. 30, 2024
Mar. 31, 2024
Jun. 30, 2023
Jun. 30, 2024
Jun. 30, 2023
Dec. 31, 2023
Oct. 07, 2022
Investment Income, Net $ 538   $ 275 $ 1,037 $ 473    
Gain (Loss) on Investments $ (1)   $ 43 (4) 388    
Income Taxes Paid       $ 76 $ 134    
GAMCO Investors, Inc. [Member]              
Investment Expense Rate 0.08%   0.08% 0.08% 0.14%    
Funds Invested in Mutual Funds $ 33,488     $ 33,488   $ 32,568  
Income From Mutual Funds 441   $ 388 849 $ 822    
Investment Income, Net     331   452    
Gain (Loss) on Investments     57   370    
MtronPTI [Member]              
Percentage of Shares Distribution Under Spinoff             100.00%
Salaries and Benefits Reimbursed 27     53      
Excess Separation Costs         28    
MtronPTI [Member] | Transitional Administrative and Management Services Agreement [Member]              
Monthly Payment 4     4      
Related Party Transaction, Amounts of Transaction 12   12 $ 24 24    
MtronPTI [Member] | Tax Indemnity and Sharing Agreement [Member]              
Income Taxes Paid $ 0 $ 0 $ 0   $ 0    
v3.24.2.u1
Note 7 - Related Party Transactions - Transactions With Related Parties (Details) - USD ($)
$ in Thousands
3 Months Ended 6 Months Ended
Jun. 30, 2024
Jun. 30, 2023
Jun. 30, 2024
Jun. 30, 2023
Dec. 31, 2023
Income $ 1,068 $ 721 $ 1,956 $ 1,705  
Expense (831) (853) (1,640) (1,587)  
Assets 42,247   42,247   $ 41,850
Liabilities 1,343   1,343   1,168
GAMCO Investors, Inc. [Member]          
Income 441 388 849 822  
Expense 0 0 0 0  
Assets 33,488   33,488   32,568
Liabilities 0   0   0
Mtron Industries Inc [Member]          
Income 0 0 0 0  
Expense (15) 12 (29) (4)  
Assets 0   0   0
Liabilities 74   74   0
Related Party [Member]          
Income 441 388 849 822  
Expense (15) $ 12 (29) $ (4)  
Assets 33,488   33,488   32,568
Liabilities $ 74   $ 74   $ 0
v3.24.2.u1
Note 8 - Income Taxes (Details Textual)
3 Months Ended 6 Months Ended
Jun. 30, 2024
Mar. 31, 2024
Jun. 30, 2023
Mar. 31, 2023
Jun. 30, 2024
Jun. 30, 2023
Effective Income Tax Rate Reconciliation, Percent 32.10%   1.50%   35.40% 70.00%
Effective Income Tax Rate Reconciliation, at Federal Statutory Income Tax Rate, Percent   21.00%   21.00%    
v3.24.2.u1
Note 9 - Stock-Based Compensation (Details Textual)
Jun. 30, 2024
shares
Incentive Plan 2011 [Member]  
Share-Based Compensation Arrangement by Share-Based Payment Award, Number of Shares Available for Grant (in shares) 955,070
v3.24.2.u1
Note 9 - Stock-based Compensation - Stock-based Compensation Expense (Details) - USD ($)
$ in Thousands
3 Months Ended 6 Months Ended
Jun. 30, 2024
Jun. 30, 2023
Jun. 30, 2024
Jun. 30, 2023
Stock-based compensation expense $ 9 $ 0 $ 18 $ 0
Restricted Stock [Member]        
Stock-based compensation expense $ 9 $ 0 $ 18 $ 0
v3.24.2.u1
Note 9 - Stock-Based Compensation - Restricted Stock Awards (Details) - Restricted Stock [Member]
$ / shares in Units, $ in Thousands
6 Months Ended
Jun. 30, 2024
USD ($)
$ / shares
shares
Balance, number of shares (in shares) | shares 20,118
Balance, weighted average grant date fair value (in dollars per share) | $ / shares $ 5,220
Balance, aggregate grant date fair value | $ $ 105
Granted, number of shares (in shares) | shares 0
Granted, weighted average grant date fair value (in dollars per share) | $ / shares $ 0
Vested, number of shares (in shares) | shares 0
Vested, weighted average grant date fair value (in dollars per share) | $ / shares $ 0
Canceled, number of shares (in shares) | shares 0
Canceled, weighted average grant date fair value (in dollars per share) | $ / shares $ 0
Balance, number of shares (in shares) | shares 20,118
Balance, weighted average grant date fair value (in dollars per share) | $ / shares $ 5,220
v3.24.2.u1
Note 10 - Stockholders' Equity - Rollforward of Outstanding Shares (Details) - shares
6 Months Ended 12 Months Ended
Jun. 30, 2024
Dec. 31, 2023
Shares, beginning of year (in shares) 81,584  
Shares, end of period (in shares) 81,584 81,584
Common Stock [Member]    
Shares, beginning of year (in shares) 5,454,639 5,434,521
Stock-based compensation (in shares) 0 20,118
Shares, end of period (in shares) 5,454,639 5,454,639
Treasury Stock, Common [Member]    
Shares, beginning of year (in shares) (81,584) (81,584)
Stock-based compensation (in shares) 0 0
Shares, end of period (in shares) (81,584) (81,584)
Common Stock Outstanding [Member]    
Shares, beginning of year (in shares) 5,373,055 5,352,937
Stock-based compensation (in shares) 0 20,118
Shares, end of period (in shares) 5,373,055 5,373,055
v3.24.2.u1
Note 11 - Earnings Per Share ("EPS") (Details Textual) - shares
3 Months Ended 6 Months Ended
Jun. 30, 2023
Jun. 30, 2023
Warrant [Member]    
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount (in shares) 1,051,664 1,051,664
v3.24.2.u1
Note 11 - Earnings Per Share ("EPS") - Reconciliation of Basic to Diluted Weighted Average Shares Outstanding (Details) - USD ($)
$ / shares in Units, $ in Thousands
3 Months Ended 6 Months Ended
Jun. 30, 2024
Jun. 30, 2023
Jun. 30, 2024
Jun. 30, 2023
Income (loss) from continuing operations $ 161 $ (130) $ 204 $ 55
Less: Net income from continuing operations attributable to non-controlling interests 24 0 46 0
Income (loss) attributable to LGL Group common shareholders from continuing operations 137 (130) 158 55
Income (loss) from discontinued operations, net of tax 0 0 0 (28)
Net income (loss) attributable to LGL Group common stockholders $ 137 $ (130) $ 158 $ 27
Weighted average common shares outstanding - basic (in shares) 5,352,937 5,352,937 5,352,937 5,352,937
Warrants (in shares) [1] 125,178 0 190,399 0
Restricted stock (in shares) [1] 4,428 0 5,533 0
Weighted average common shares outstanding - diluted (in shares) [1] 5,482,543 5,352,937 5,548,869 5,352,937
Income (loss) from continuing operations (in dollars per share) [2] $ 0.03 $ (0.02) $ 0.03 $ 0.01
Income (loss) from discontinued operations (in dollars per share) [2] 0 0 0 (0.01)
Net income (loss) attributable to LGL Group common stockholders (in dollars per share) [2] 0.03 (0.02) 0.03 0.01
Income (loss) from continuing operations (in dollars per share) [2] 0.02 (0.02) 0.03 0.01
Income (loss) from discontinued operations (in dollars per share) [2] 0 0 0 (0.01)
Net income (loss) attributable to LGL Group common stockholders (in dollars per share) [2] $ 0.02 $ (0.02) $ 0.03 $ 0.01
[1] For the three and six months ended June 30, 2023, weighted average shares used for calculating earnings per share excludes warrants to purchase 1,051,664 shares of common stock.
[2] Basic and diluted earnings per share are calculated using actual, unrounded amounts. Therefore, the components of earnings per share may not sum to its corresponding total.
v3.24.2.u1
Note 13 - Other Financial Statement Information - Schedule of Components of Inventory (Details) - USD ($)
$ in Thousands
Jun. 30, 2024
Dec. 31, 2023
Raw materials $ 363 $ 271
Work in process 54 9
Finished goods 3 0
Total gross inventory 420 280
Reserve for excess and obsolete inventory (84) (76)
Inventories, net $ 336 $ 204
v3.24.2.u1
Note 13 - Other Financial Statement Information - Intangible Assets, Net (Details) - USD ($)
$ in Thousands
Jun. 30, 2024
Dec. 31, 2023
Gross intangible assets $ 214 $ 214
Less: Accumulated amortization (168) (157)
Intangible assets, net 46 57
Intellectual Property [Member]    
Gross intangible assets $ 214 $ 214
v3.24.2.u1
Note 14 - Domestic and Foreign Revenues - Schedule of Revenues (Details) - USD ($)
$ in Thousands
3 Months Ended 6 Months Ended
Jun. 30, 2024
Jun. 30, 2023
Jun. 30, 2024
Jun. 30, 2023
Net sales $ 531 $ 403 $ 923 $ 844
SPAIN        
Net sales 56 236 104 236
INDIA        
Net sales 15 0 99 23
ROMANIA        
Net sales 0 0 94 0
AUSTRALIA        
Net sales 87 5 87 5
CANADA        
Net sales 11 47 12 90
All Other Foreign Countries [Member]        
Net sales 15 46 47 57
Non-US [Member]        
Net sales 184 334 443 411
UNITED STATES        
Net sales $ 347 $ 69 $ 480 $ 433

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