The LGL Group, Inc. (NYSE MKT: LGL) (the “Company”), announced
results for the quarter ended March 31, 2015.
Summary of Q1 2015 Results:
- Revenues of $5.4 million, a decrease of
11.9% compared to Q1 2014
- Net loss of ($0.2) million, or ($0.07)
per share, improved 78.0% vs. Q1 2014
- Adjusted EBITDA of $0.1 million, or
$0.03 per share, improved 114.3% vs. Q1 2014
- Gross margin of 33.3%, improved 7.3
percentage points vs. Q1 2014
Total revenues for the quarter ended March 31, 2015, were
$5,404,000, a decrease of 11.9% from revenues of $6,131,000 for the
quarter ended March 31, 2014. Net loss for the quarter ended
March 31, 2015, was ($178,000) compared with ($809,000) for the
quarter ended March 31, 2014. Basic and diluted net loss per share
for the quarter ended March 31, 2015 and 2014, was ($0.07) and
($0.31), respectively. Gross margins improved to 33.3% for the
quarter ended March 31, 2015; a 7.3 percentage point increase
compared to 26.0% for the quarter ended March 31, 2014.
Adjusted EBITDA was $68,000, or $0.03 per share, for the quarter
ended March 31, 2015, compared to EBITDA loss of ($476,000), or
($0.18) per share, for the quarter ended March 31, 2014. The
improvement in adjusted EBITDA is due to a 7.3 percentage point
improvement in gross margin and a year-over-year decrease of
$450,000 in engineering, selling and administrative expenses as a
result of the continued benefit from the Company’s efforts to
operate more efficiently.
The Company’s Executive Chairman and CEO, Michael Ferrantino,
Sr., said: “Your new management team has now completed three
quarters and the progress continues. Although our markets continue
to be challenging, we are encouraged; new orders have stabilized
following and almost continuous decline over the past several
years. With the rightsizing of the business completed in the last
half of 2014, as well as the improvement in margins, we are pleased
to report our journey to profitability is on the horizon. While we
continue on the road to profitability we have not jeopardized the
longer term growth strategy of the Company. We have continued to
upgrade our talent in marketing and engineering, adding two key
employees this quarter. I, as well as all of our team, am committed
to our continuous improvement program and will do our best to move
this company forward.”
Positive Cash Flows from Operations; Solid Capital
Position
Operating cash flows were positive for Q1 2015, with net cash
provided by operating activities of $112,000 for the quarter ended
March 31, 2015, compared to net cash used in operations of
($540,000) for the quarter ended March 31, 2014. This was primarily
the result of the improvement in operating margins during the
quarter.
Total cash and cash equivalents cash was $5.1 million, or $1.96
per share, at March 31, 2015, compared to $5.2 million, or $2.00
per share, at December 31, 2014. Adjusted working capital (accounts
receivable, net, plus inventory, net, less accounts payable) was
down slightly to $5.6 million as of March 31, 2015, compared to
$5.7 million as of December 31, 2014, which reflects the continuing
effort to manage working capital levels to operating activity.
The Company’s Chairman of the Board, Marc Gabelli, said: “I, as
well as the entire board, believe the building blocks are in place
to return the Company to profitability and increase shareholder
value. We are encouraged by the results of the first quarter; it is
the strongest start to a fiscal year that this Company has had in
some time. With exciting new products in our pipeline, as well as
the talent we have invested in, we expect that over the next
few years, as qualification programs are completed, new orders will
grow, profits will increase and our shareholders will be
rewarded.”
About The LGL Group, Inc.
The LGL Group, Inc., through its wholly-owned subsidiary
MtronPTI, manufactures and markets highly-engineered electronic
components used to control the frequency or timing of signals in
electronic circuits. These components ensure reliability and
security in aerospace and defense communications, synchronize data
transfers throughout the wireless and internet infrastructure, and
provide low noise and base accuracy for lab instruments.
Headquartered in Orlando, Florida, the Company has additional
design and manufacturing facilities in Yankton, South Dakota and
Noida, India, with local sales offices in Sacramento, California
and Hong Kong.
For more information on the Company and its products and
services, contact Patti Smith 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 Per
Share Amounts) For the three months ended
March 31, 2015 2014 REVENUES $
5,404 $ 6,131 Costs and expenses: Manufacturing cost of sales 3,605
4,535 Engineering, selling and administrative 1,960
2,410 OPERATING LOSS (161 ) (814 )
Total other (expense) income (17 ) 5 LOSS
BEFORE INCOME TAXES (178 ) (809 ) Income tax benefit (provision)
— — NET LOSS $ (178 ) $ (809 )
Weighted average number of shares used in basic and diluted
EPS calculation 2,616,485 2,594,784
BASIC AND DILUTED NET LOSS PER COMMON SHARE $ (0.07 ) $ (0.31 )
THE LGL GROUP, INC. Condensed Consolidated Balance Sheets
– UNAUDITED (Dollars in Thousands) March
31, December 31, ASSETS
2015 2014 Cash and
cash equivalents $ 5,048 $ 5,192 Accounts receivable, less
allowances of $47 and $43, respectively 3,152 3,266 Inventories,
net 4,030 4,198 Prepaid expenses and other current assets
317 278 Total current assets 12,547 12,934 Property, plant,
and equipment, net 3,601 3,547 Intangible assets, net 515 528 Other
assets 250 253 Total Assets $ 16,913 $ 17,262
LIABILITIES AND STOCKHOLDERS’ EQUITY Total liabilities 2,828
3,025 Stockholders’ Equity 14,085 14,237 Total
Liabilities and Stockholders’ Equity $ 16,913 $ 17,262
Reconciliations of GAAP to Non-GAAP Measures
To supplement our consolidated condensed financial statements
presented on a GAAP basis, the Company uses certain non-GAAP
measures, including Adjusted EBITDA, which we define as net income
(loss) adjusted to exclude depreciation and amortization expense,
interest income (expenses), provision (benefit) for income taxes
and stock-based compensation expense. We believe such non-GAAP
measures are appropriate to enhance an overall understanding of our
past financial performance and also our prospects for the future.
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 2015 GAAP Loss Before
Income Taxes to Non-GAAP Adjusted EBITDA/ (EBITDA Loss):
For the three months ended (000s,
except shares and per share amounts)
March 31, 2015 March 31, 2014
Net loss before income taxes $ (178) $ (809) Add: Interest expense
5 8 Add: Depreciation and amortization 228 235 Add: Non-cash stock
compensation 13 90
Adjusted EBITDA (EBITDA loss)
$ 68 $ (476) Weighted average number of shares used in basic
and diluted EPS calculation 2,616,485 2,594,784
Adjusted EBITDA (EBITDA loss) per
share
$ 0.03
$ (0.18)
The LGL Group, Inc.Patti Smith,
407-298-2000pasmith@lglgroup.com
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