The LGL Group, Inc. (NYSE American: LGL) (the “Company” or
“LGL”), announced its financial results for the three and six
months ended June 30, 2020.
- Revenues of $7.1 million declined (9.9%) compared to Q2 2019
revenues of $7.8 million
- Operating income of $184,000 in Q2 2020 versus $856,000 for the
prior year period
- Diluted net income of $0.05 per share compared to $0.19 per
share for the prior year quarter
- Order backlog increased to $22.5 million (2.9%) from $21.9
million at December 31, 2019 although it declined (8.1%) from $24.5
million at June 30, 2019
- Adjusted EBITDA for Q2, 2020 was $343,000 compared to $976,000
for Q2 2019
The Company’s President and Chief Executive Officer, Ivan
Arteaga, said, “The Company has been successful at minimizing the
impact of the COVID-19 pandemic on its results with sales down only
9.9% for the quarter. The benefit of a business base of
high-quality customers and long-tail military orders supporting our
backlog and having our India production back in full operation
should continue to help minimize COVID-19 impacts on results.”
Commenting on the Company’s Q2 2020 results, Bill Drafts,
President and Chief Executive Officer of LGL’s main operating unit,
MtronPTI, stated, “It was a challenging quarter but through
dedication, determination and team work we delivered solid results
and emerged with even closer relationships with our primary
customers.”
SECOND QUARTER RESULTS – In 2020, LGL’s second quarter revenues
decreased $779,000, or 9.9%, to $7.1 million compared to $7.8
million for the corresponding quarter in 2019. Adjusted EBITDA was
$0.3 million in the second quarter of 2020 versus $1.0 million in
the second quarter of 2019. The lower sales levels reflect the
production interruption from the India operation shut down which
resumed limited operations at the beginning of May but has been
fully operational since the end of June. As a result of the
COVID-19 pandemic, the Company’s production operations in India
were closed for about six weeks during the quarter effecting both
revenues and adjusted EBITDA.
EARNINGS PER SHARE – Diluted earnings per share from ongoing
operations, during the second quarter were $0.05 per share in 2020
as compared to $0.19 per share in the second quarter of 2019. The
decrease was largely attributable to COVID-related interruption at
our India operation offset partially by a $0.02 per share increase
in investment income compared with 2019. Weighted average shares
outstanding at June 30, 2020 were 5.2 million versus 5.0 million at
June 30, 2019.
BALANCE SHEET – LGL’s balance sheet continued to improve in
2020. The balance sheet at Q2 2020 reflects a net cash position,
including marketable securities of $22.2 million at June 30, 2020
compared to $18.1 million at December 31, 2019. On May 12, 2020
M-tron Industries, Inc. (“MtronPTI”), and Piezo Technology, Inc.
(“PTI”), both operating subsidiaries of the Company, entered into a
revolving line of credit (“Line of Credit”) for up to $3.5 million,
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%, matures on May
12, 2022 and had minimal borrowings outstanding ($103,000) at June
30, 2020. The Company continues to seek opportunities to grow
through acquisition both directly and through its investment in the
SPAC.
OPERATING STATISTICS – As of June 30, 2020, the Company’s
backlog decreased 8.1% to $22.5 million as compared to $24.5
million in the second quarter of 2019.
Our summary operating statistics are as follows:
Three months ended
June 30,
Change
(Amounts in millions, except
book:bill)
2020
2019
$
%
Bookings (Sales)
$
6,999
$
11,019
$
(4,020
)
(36.5
%)
Shipments (Revenues)
$
7,059
$
7,838
$
(779
)
(9.9
%)
Book:Bill
0.992
1.406
(0.414
)
(29.5
%)
Backlog
$
22,495
$
24,482
$
(1,987
)
(8.1
%)
Six months ended
June 30,
Change
(Amounts in millions, except
book:bill)
2020
2019
$
%
Bookings (Sales)
$
16,316
$
21,446
$
(5,130
)
(23.9
%)
Shipments (Revenues)
$
15,677
$
14,470
$
1,207
8.3
%
Book:Bill
1.041
1.482
(0.441
)
(29.8
%)
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
June 30,
2020
2019
REVENUES
$
7,059
$
7,838
Costs and expenses:
Manufacturing cost of sales
4,816
4,706
Engineering, selling and
administrative
2,059
2,276
OPERATING INCOME
184
856
Total other (expense) income, net
128
117
INCOME BEFORE INCOME TAXES
312
973
Income tax provision
57
34
NET INCOME
$
255
$
939
Weighted average number of shares used in
basic EPS calculation
5,211,773
4,888,059
BASIC NET INCOME PER COMMON SHARE
$
0.05
$
0.19
Weighted average number of shares used in
diluted EPS calculation
5,245,162
4,972,418
DILUTED NET INCOME PER COMMON SHARE
$
0.05
$
0.19
For the Six Months Ended June
30,
2020
2019
REVENUES
$
15,677
$
14,470
Costs and expenses:
Manufacturing cost of sales
10,478
8,921
Engineering, selling and
administrative
4,355
4,259
OPERATING INCOME
844
1,290
Total other (expense) income, net
(295
)
271
INCOME BEFORE INCOME TAXES
549
1,561
Income tax provision
111
40
NET INCOME
$
438
$
1,521
Weighted average number of shares used in
basic EPS calculation
5,132,414
4,857,603
BASIC NET INCOME PER COMMON SHARE
$
0.09
$
0.31
Weighted average number of shares used in
diluted EPS calculation
5,170,740
4,962,110
DILUTED NET INCOME PER COMMON SHARE
$
0.08
$
0.31
THE LGL GROUP, INC.
Condensed Consolidated Balance
Sheets
(Unaudited)
(Dollars in Thousands)
June 30, 2020
December 31, 2019
ASSETS
Cash and cash equivalents
$
16,639
$
12,453
Marketable securities
5,524
5,631
Accounts receivable, net
4,470
4,445
Inventories, net
6,018
6,016
Prepaid expenses and other current
assets
266
365
Total Current Assets
32,917
28,910
Property, plant, and equipment, net
2,712
2,831
Equity investment in unconsolidated
subsidiary
3,195
3,334
Deferred income taxes, net
3,195
3,307
Intangible assets, net
387
402
Right-of-use lease asset
296
331
Other assets
-
102
Total Assets
$
42,702
$
39,217
LIABILITIES AND STOCKHOLDERS' EQUITY
Total Current Liabilities
4,007
4,324
Total Stockholders' Equity
38,695
34,893
Total Liabilities and Stockholders'
Equity
$
42,702
$
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
June 30,
2020
2019
(000's, except share and per share
amounts)
Net income before income taxes
$
312
$
973
Interest expense
4
—
Depreciation and amortization
126
121
Non-cash stock compensation
37
6
Investment loss (income)
(236
)
(124
)
Loss on equity investment in
unconsolidated subsidiary
100
—
Adjusted EBITDA
$
343
$
976
Basic per share information:
Weighted average shares outstanding
5,211,773
4,888,059
Adjusted EBITDA per share
$
0.07
$
0.20
Diluted per share information:
Weighted average shares outstanding
5,245,162
4,972,418
Adjusted EBITDA per share
$
0.07
$
0.20
For the Six Months Ended June
30,
2020
2019
(000's, except shares and per share
amounts)
Net income before income taxes
$
549
$
1,561
Interest expense (income)
4
(1
)
Depreciation and amortization
261
240
Non-cash stock compensation
47
12
Investment loss (income)
57
(270
)
Loss on equity investment in
unconsolidated subsidiary
139
—
Adjusted EBITDA
$
1,057
$
1,542
Basic per share information:
Weighted average shares outstanding
5,132,414
4,857,603
Adjusted EBITDA per share
$
0.21
$
0.32
Diluted per share information:
Weighted average shares outstanding
5,170,740
4,962,110
Adjusted EBITDA per share
$
0.20
$
0.31
View source
version on businesswire.com: https://www.businesswire.com/news/home/20200811005800/en/
James Tivy The LGL Group, Inc. jtivy@lglgroup.com (407)
298-2000
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