BusinessWire

The LGL Group Reports Third Quarter 2020 Results

ORLANDO, Fla.--(BUSINESS WIRE)--The LGL Group, Inc. (NYSE American: LGL) (the “Company” or “LGL”), announced its financial results for the three and nine months ended September 30, 2020.

  • Revenues of $8.1 million declined (6.0%) compared to Q3 2019 revenues of $8.6 million
  • Operating income was $0.7 million in Q3 2020 versus $1.1 million for the prior year period
  • Diluted net income of $0.12 per share compared to $0.91 per share ($0.24 per share excluding a $3.3 million tax benefit) for the prior year quarter
  • Order backlog was $21.5 million compared to $23.3 million at September 30, 2019
  • Adjusted EBITDA for Q3 2020 was $0.9 million compared to $1.3 million for Q3 2019
  • Warrant dividend declared October 29, 2020 providing shareholders’ efficient participation in future value.

The Company’s President and Chief Executive Officer, Ivan Arteaga, said, “I commend the team for pulling together as we worked through the spring COVID-19 shock, and ensuing summer impacts. While demand from the avionics industry has contracted significantly, the trajectory of the military/aerospace business is strong and growing. Recent orders offer promise that we are getting back to normal.”

Commenting on the Company’s Q3 2020 results, Bill Drafts, President and Chief Executive Officer of LGL’s main operating unit, MtronPTI, stated, “Our results improved sequentially quarter-to-quarter as the overall business environment began to stabilize and we could focus on the strategic actions previously planned. I would like to thank the team for their dedication and thank our customers for their continued business.”

THIRD QUARTER RESULTS – In 2020, LGL’s third quarter revenues decreased $0.5 million, or 6.0%, to $8.1 million compared to $8.6 million for the corresponding quarter in 2019. Operating income declined to $0.7 million reflecting lower sales than prior year, although sales showed improvement over second quarter 2020 levels. Product mix changes and costs related to the avionics production work slowdown also contributed to the operating profit decline. Adjusted EBITDA was $0.9 million in the third quarter of 2020 versus $1.3 million in the third quarter of 2019.

EARNINGS PER SHARE – Diluted earnings per share from ongoing operations, during the third quarter were $0.12 per share in 2020 as compared to $0.91 per share in the third quarter of 2019. The decrease was largely attributable to the $3.3 million tax benefit in 2019 primarily due to release of the valuation allowance related to the Company’s U.S. deferred tax assets and also from the operating income impacts noted above. Weighted average shares outstanding at September 30, 2020 were 5.3 million versus 5.0 million at September 30, 2019.

BALANCE SHEET – LGL’s balance sheet continued to improve in 2020. The balance sheet reflects a net cash position including marketable securities of $22.9 million at September 30, 2020 compared to $18.1 million at December 31, 2019. The Company continues to explore growth organically and through diversified merger and acquisitions and believes the relationship with the SPAC has enhanced its strategic profile in this context.

OPERATING STATISTICS – As of September 30, 2020, the Company’s backlog decreased 7.9% to $21.5 million as compared to $23.3 million at September 30, 2019.

Our summary operating statistics are as follows:

 

Three months ended

 

 

 

 

 

 

 

 

 

 

September 30,

 

 

Change

 

(Amounts in millions, except book:bill)

2020

 

 

2019

 

 

$

 

 

%

 

Bookings (Sales)

$

7,031

 

 

$

7,391

 

 

$

(360

)

 

 

(4.9

%)

Shipments (Revenues)

$

8,071

 

 

$

8,588

 

 

$

(517

)

 

 

(6.0

%)

Book:Bill

 

0.871

 

 

 

0.861

 

 

 

0.011

 

 

 

1.2

%

Backlog

$

21,456

 

 

$

23,285

 

 

$

(1,829

)

 

 

(7.9

%)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Nine months ended

 

 

 

 

 

 

 

 

 

 

September 30,

 

 

Change

 

(Amounts in millions, except book:bill)

2020

 

 

2019

 

 

$

 

 

%

 

Bookings (Sales)

$

23,347

 

 

$

28,837

 

 

$

(5,490

)

 

 

(19.0

%)

Shipments (Revenues)

$

23,748

 

 

$

23,058

 

 

$

690

 

 

 

3.0

%

Book:Bill

 

0.983

 

 

 

1.251

 

 

 

(0.268

)

 

 

(21.4

%)

About The LGL Group, Inc.

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

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

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

Caution Concerning Forward Looking Statements

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

 

THE LGL GROUP, INC.

Condensed Consolidated Statements of Operations

(Unaudited)

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

 

 

 

For the Three Months Ended
September 30,

 

 

 

2020

 

 

2019

 

REVENUES

 

$

8,071

 

 

$

8,588

 

Costs and expenses:

 

 

 

 

 

 

 

 

Manufacturing cost of sales

 

 

5,203

 

 

 

5,049

 

Engineering, selling and administrative

 

 

2,159

 

 

 

2,417

 

OPERATING INCOME

 

 

709

 

 

 

1,122

 

Total other income (expense), net

 

 

91

 

 

 

82

 

INCOME BEFORE INCOME TAXES

 

 

800

 

 

 

1,204

 

Income tax expense (benefit)

 

 

171

 

 

 

(3,326

)

NET INCOME

 

$

629

 

 

$

4,530

 

 

 

 

 

 

 

 

 

 

Weighted average number of shares used in basic EPS calculation

 

 

5,212,652

 

 

 

4,901,698

 

BASIC NET INCOME PER COMMON SHARE

 

$

0.12

 

 

$

0.92

 

Weighted average number of shares used in diluted EPS calculation

 

 

5,251,078

 

 

 

4,965,808

 

DILUTED NET INCOME PER COMMON SHARE

 

$

0.12

 

 

$

0.91

 

 

 

For the Nine Months Ended
September 30,

 

 

 

2020

 

 

2019

 

REVENUES

 

$

23,748

 

 

$

23,058

 

Costs and expenses:

 

 

 

 

 

 

 

 

Manufacturing cost of sales

 

 

15,681

 

 

 

13,970

 

Engineering, selling and administrative

 

 

6,514

 

 

 

6,676

 

OPERATING INCOME

 

 

1,553

 

 

 

2,412

 

Total other income (expense), net

 

 

(204

)

 

 

353

 

INCOME BEFORE INCOME TAXES

 

 

1,349

 

 

 

2,765

 

Income tax expense (benefit)

 

 

282

 

 

 

(3,286

)

NET INCOME

 

$

1,067

 

 

$

6,051

 

 

 

 

 

 

 

 

 

 

Weighted average number of shares used in basic EPS calculation

 

 

5,159,452

 

 

 

4,872,461

 

BASIC NET INCOME PER COMMON SHARE

 

$

0.21

 

 

$

1.24

 

Weighted average number of shares used in diluted EPS calculation

 

 

5,195,754

 

 

 

4,965,989

 

DILUTED NET INCOME PER COMMON SHARE

 

$

0.21

 

 

$

1.22

 

 

THE LGL GROUP, INC.

Condensed Consolidated Balance Sheets

(Unaudited)

(Dollars in Thousands)

 
 

 

 

September 30,
2020

 

 

December 31,
2019

 

ASSETS

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

17,276

 

 

$

12,453

 

Marketable securities

 

 

5,646

 

 

 

5,631

 

Accounts receivable, net

 

 

4,644

 

 

 

4,445

 

Inventories, net

 

 

5,430

 

 

 

6,016

 

Prepaid expenses and other current assets

 

 

268

 

 

 

365

 

Total Current Assets

 

 

33,264

 

 

 

28,910

 

Property, plant, and equipment, net

 

 

2,824

 

 

 

2,831

 

Equity investment in unconsolidated subsidiary

 

 

3,134

 

 

 

3,334

 

Deferred income taxes, net

 

 

3,046

 

 

 

3,307

 

Intangible assets, net

 

 

366

 

 

 

402

 

Right-of-use lease asset

 

 

452

 

 

 

331

 

Other assets

 

 

-

 

 

 

102

 

Total Assets

 

$

43,086

 

 

$

39,217

 

LIABILITIES AND STOCKHOLDERS' EQUITY

 

 

 

 

 

 

 

 

Total Current Liabilities

 

 

3,700

 

 

 

4,324

 

Total Stockholders' Equity

 

 

39,386

 

 

 

34,893

 

Total Liabilities and Stockholders' Equity

 

$

43,086

 

 

$

39,217

 

Reconciliations of GAAP to Non-GAAP Measures

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

 

Reconciliation of GAAP Net Income Before Income Taxes to Non-GAAP Adjusted EBITDA:

 
 

 

 

For the Three Months Ended
September 30,

 

 

 

2020

 

 

2019

 

(000's, except share and per share amounts)

 

 

 

 

 

 

 

 

Net income before income taxes

 

$

800

 

 

$

1,204

 

Interest expense (income)

 

 

3

 

 

 

 

Depreciation and amortization

 

 

131

 

 

 

125

 

Non-cash stock compensation

 

 

57

 

 

 

5

 

Investment income

 

 

(124

)

 

 

(76

)

Loss on equity investment in unconsolidated subsidiary

 

 

61

 

 

 

 

Adjusted EBITDA

 

$

928

 

 

$

1,258

 

 

 

 

 

 

 

 

 

 

Basic per share information:

 

 

 

 

 

 

 

 

Weighted average shares outstanding

 

 

5,212,652

 

 

 

4,901,698

 

Adjusted EBITDA per share

 

$

0.18

 

 

$

0.26

 

 

 

 

 

 

 

 

 

 

Diluted per share information:

 

 

 

 

 

 

 

 

Weighted average shares outstanding

 

 

5,251,078

 

 

 

4,965,808

 

Adjusted EBITDA per share

 

$

0.18

 

 

$

0.25

 

 

 

For the Nine Months Ended
September 30,

 

 

 

2020

 

 

2019

 

(000's, except shares and per share amounts)

 

 

 

 

 

 

 

 

Net income before income taxes

 

$

1,349

 

 

$

2,765

 

Interest expense (income)

 

 

7

 

 

 

(1

)

Depreciation and amortization

 

 

392

 

 

 

365

 

Non-cash stock compensation

 

 

104

 

 

 

17

 

Investment income

 

 

(67

)

 

 

(346

)

Loss on equity investment in unconsolidated subsidiary

 

 

200

 

 

 

 

Adjusted EBITDA

 

$

1,985

 

 

$

2,800

 

 

 

 

 

 

 

 

 

 

Basic per share information:

 

 

 

 

 

 

 

 

Weighted average shares outstanding

 

 

5,159,452

 

 

 

4,872,461

 

Adjusted EBITDA per share

 

$

0.38

 

 

$

0.57

 

 

 

 

 

 

 

 

 

 

Diluted per share information:

 

 

 

 

 

 

 

 

Weighted average shares outstanding

 

 

5,195,754

 

 

 

4,965,989

 

Adjusted EBITDA per share

 

$

0.38

 

 

$

0.56

 

 


Contacts

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