The LGL Group, Inc. (NYSE American: LGL) (the “Company” or
“LGL”), announced its financial results for the three months ended
March 31, 2020.
- Revenues of $8.6 million, up 29.9% compared to Q1 2019 revenues
of $6.6 million
- Operating income of $660,000 in Q1 2020 versus $434,000 for the
prior year period.
- Diluted net income of $0.04 per share, compared to $0.12 per
share for the prior year quarter
- Order backlog improved 5.9% to $22.6 million at March 31, 2020
from $21.3 million at March 31, 2019
- Adjusted EBITDA for Q1, 2020 was $714,000, compared to $566,000
for Q1 2019.
Regarding the COVID-19 impacts, Bill Drafts, MTronPTI’s CEO
said, “The Company has taken measures to protect the health and
safety of our employees, work with our customers and suppliers to
minimize potential disruptions, and support our community in
addressing the challenges posed by this global pandemic. The
COVID-19 pandemic is expected to have a negative impact on our
operating results, but the level of materiality remains
uncertain.”
Ivan Arteaga, President and Chief Executive Officer said, “Our
Noida, India facility has been impacted by the Indian government’s
nationwide lockdown, ceasing production effective on March 23, 2020
with production activities resuming on May 6, 2020 with reduced
staffing. Production from Noida has impacted our revenues
moderately, and we are pursuing U.S. based alternatives.”
RETURN OF PPP LOAN – On May 14, 2020, the Company elected to
return the previously disclosed $1,907,500 in aggregate principal
amount originally borrowed on April 15, 2020 by its subsidiaries
from the Paycheck Protection Program (the “PPP”) of the Coronavirus
Aid, Relief and Economic Security Act of 2020 (the “CARES Act”).
Management and the Board of Directors determined that while it
seems clear from our core analysis that we qualified to apply for
PPP loans and that our need for the capital is very real, given the
continuing changes to the guidance that determines the
implementation of the rules, returning the funds is the most
prudent path.
FIRST QUARTER RESULTS – In 2020, LGL’s first quarter revenues
increased $2.0 million, or 29.9%, to $8.6 million compared to $6.6
million for the corresponding quarter in 2019. Adjusted EBITDA was
$0.7 million in the first quarter of 2020 versus $0.6 million in
the first quarter of 2019.
EARNINGS PER SHARE – Diluted earnings per share from ongoing
operations, during the first quarter were $0.04 per share in 2019
as compared to $0.12 per share in the first quarter of 2019. The
investment loss in Q1, 2020 was ($293,000), a change of $439,000
from the investment gain of $146,000 posted in Q1, 2019, and caused
an impact of approximately ($0.09) per diluted share versus the
prior year quarter. Weighted average shares outstanding at March
31, 2020 were 5.1 million versus 4.98 million at December 31,
2019.
BALANCE SHEET – LGL’s balance sheet continued to improve in
2020. The balance sheet at Q1, 2020 reflects a net cash position,
including marketable securities and with no financial debt of $21.9
million at March 31, 2020 compared to $18.1 million at December 31,
2019. On May 12, 2020 M-tron Industries, Inc. (“MtronPTI”), and
Piezo Technology, Inc. (“PTF”), both operating subsidiaries of the
Company, entered into a revolving line of credit (“Line of Credit”)
for up to $3,500,000, secured by certain tangible and intangible
property of those subsidiaries. The Line of Credit carries an
interest rate of the LIBOR 30-day rate plus 2.50%, with a floor of
0.50% and matures on May12, 2022.
OPERATING STATISTICS – As of March 31, 2020, the Company’s
backlog increased 5.9% to $22.6 million as compared to $21.3
million in the first quarter of 2019. Book-to-bill was 1.081:1
during Q1, 2020, indicating that the Company continues to benefit
from strong performance from its sales teams.
Our summary operating statistics are as follows:
Quarter ended
March 31,
Change
(Amounts in millions, except
book:bill)
2020
2019
$
%
Bookings (Sales)
$
9,317
$
10,427
$
(1,110
)
(10.6
%)
Shipments (Revenues)
$
8,618
$
6,632
$
1,986
29.9
%
Book:Bill
1.081
1.572
(0.491
)
(31.2
%)
About The LGL Group, Inc.
The LGL Group, Inc., through its two principal subsidiaries
MtronPTI and PTF, designs, manufactures and markets
highly-engineered electronic components used to control the
frequency or timing of signals in electronic circuits, and designs
high performance frequency and time reference standards that form
the basis for timing and synchronization in various
applications.
Headquartered in Orlando, Florida, the Company has additional
design and manufacturing facilities in Yankton, South Dakota,
Wakefield, Massachusetts and Noida, India, with local sales offices
in Hong Kong and Austin, Texas.
For more information on the Company and its products and
services, contact James Tivy at The LGL Group, Inc., 2525 Shader
Rd., Orlando, Florida 32804, (407) 298-2000, or visit
www.lglgroup.com and www.mtronpti.com.
Caution Concerning Forward Looking Statements
This press release may contain forward-looking statements made
in reliance upon the safe harbor provisions of Section 27A of the
Securities Act of 1933, as amended, and Section 21 E of the
Securities Exchange Act of 1934, as amended. Forward-looking
statements include all statements that do not relate solely to
historical or current facts, and can be identified by the use of
words such as “may,” “will,” “expect,” “project,” “estimate,”
“anticipate,” “plan,” “believe,” “potential,” “should,” “continue”
or the negative versions of those words or other comparable words.
These forward-looking statements are not guarantees of future
actions or performance. These forward-looking statements are based
on information currently available to us and our current plans or
expectations, and are subject to a number of uncertainties and
risks that could significantly affect current plans, anticipated
actions and our future financial condition and results. Certain of
these risks and uncertainties are described in greater detail in
our filings with the Securities and Exchange Commission. We are
under no obligation to (and expressly disclaim any such obligation
to) update or alter our forward-looking statements, whether as a
result of new information, future events or otherwise.
THE LGL GROUP, INC.
Condensed Consolidated
Statements of Operations
(Unaudited)
(Dollars in Thousands, Except
Share and Per Share Amounts)
For The Three Months Ended
March 31,
2020
2019
REVENUES
$
8,618
$
6,632
Costs and expenses:
Manufacturing cost of sales
5,662
4,215
Engineering, selling and
administrative
2,296
1,983
OPERATING INCOME
660
434
Total other (expense) income, net
(423
)
154
INCOME BEFORE INCOME TAXES
237
588
Income tax provision
54
6
NET INCOME
$
183
$
582
Weighted average number of shares used in
basic EPS calculation
5,052,184
4,838,568
BASIC NET INCOME PER COMMON SHARE
$
0.04
$
0.12
Weighted average number of shares used in
diluted EPS calculation
5,097,879
4,959,636
DILUTED NET INCOME PER COMMON SHARE
$
0.04
$
0.12
THE LGL GROUP, INC.
Condensed Consolidated Balance
Sheets
(Unaudited)
(Dollars in Thousands)
March 31, 2020
December 31, 2019
ASSETS
Cash and cash equivalents
$
16,631
$
12,453
Marketable securities
5,306
5,631
Accounts receivable, net
4,819
4,445
Inventories, net
5,986
6,016
Prepaid expenses and other current
assets
341
365
Total Current Assets
33,083
28,910
Property, plant, and equipment, net
2,771
2,831
Equity investment in unconsolidated
subsidiary
3,295
3,334
Deferred income taxes, net
3,248
3,307
Intangible assets, net
383
402
Right-of-use lease asset
318
331
Other assets
-
102
Total Assets
$
43,098
$
39,217
LIABILITIES AND STOCKHOLDERS' EQUITY
Total Current Liabilities
4,700
4,324
Total Stockholders' Equity
38,398
34,893
Total Liabilities and Stockholders'
Equity
$
43,098
$
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
March 31,
2020
2019
(000's, except share and per share
amounts)
Net income before income taxes
$
237
$
588
Interest income
—
(1
)
Depreciation and amortization
135
119
Non-cash stock compensation
10
6
Investment loss (income)
293
(146
)
Loss on equity investment in
unconsolidated subsidiary
39
—
Adjusted EBITDA
$
714
$
566
Basic per share information:
Weighted average shares outstanding
5,052,184
4,838,568
Adjusted EBITDA per share
$
0.14
$
0.12
Diluted per share information:
Weighted average shares outstanding
5,097,879
4,959,636
Adjusted EBITDA per share
$
0.14
$
0.11
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version on businesswire.com: https://www.businesswire.com/news/home/20200515005568/en/
James Tivy The LGL Group, Inc. jtivy@lglgroup.com (407)
298-2000
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