The LGL Group, Inc. Reports First Quarter 2024 Results
The LGL Group (NYSE American: LGL) released its financial results for Q1 2024, ending March 31, 2024. During this period, total revenues fell by $96,000 to $888,000 compared to Q1 2023. Income from continuing operations before taxes decreased by $193,000 to $57,000. Net income per diluted share dropped by $0.03 to $0.00. Cash and marketable securities stood at $40.89 million.
Tim Foufas, Co-CEO, noted a revenue decline in the Electronics Instruments segment but pointed out an improved order backlog. The order backlog rose to $341,000, an increase of $198,000 from December 31, 2023.
Gross margin fell to 48.0% from 56.5% in Q1 2023, attributed to a lower margin product mix and higher labor costs. Working capital was $41.17 million, and investments in U.S. Treasury money market funds provided higher net investment income.
- Order backlog increased by $198,000 to $341,000 as of March 31, 2024.
- Cash and cash equivalents and marketable securities totaled $40.89 million.
- Working capital slightly improved to $41.17 million.
- Investments in U.S. Treasury money market funds yielded higher net investment income.
- Total revenues decreased by $96,000 to $888,000 compared to Q1 2023.
- Income from continuing operations before taxes fell by $193,000 to $57,000.
- Net income per diluted share decreased from $0.03 to $0.00.
- Gross margin declined from 56.5% to 48.0%, due to a lower margin product mix and higher labor costs.
- Higher engineering, selling, and administrative costs related to increased salaries and wages.
Insights
Financial Performance: The LGL Group's Q1 2024 performance reflects a
Gross Margin and Cost Management: The gross margin decreased significantly from
Backlog and Liquidity: On a positive note, the order backlog increased to
Conclusion: While the current quarter's figures are underwhelming, the increase in order backlog and strong liquidity position indicate potential for future growth. Investors should monitor the company's ability to convert this backlog into sustained revenue and profitability.
Market Trends: The decline in revenue for LGL Group's Electronics Instruments segment can be indicative of broader market trends. The sector has been facing headwinds due to supply chain constraints and fluctuating demand. However, the increase in order backlog suggests a potential rebound, aligning with industry expectations that demand will pick up in the latter half of 2024.
Investment Strategy: The company's focus on U.S. Treasury money market funds reflects a conservative investment strategy aimed at preserving capital in a volatile market. This is a prudent approach given current economic uncertainties and varying U.S. Treasury yields, which have been attractive relative to other fixed-income securities.
Long-term Prospects: LGL Group's ability to navigate through current challenges while maintaining a strong liquidity position and increasing backlog provides a cautiously optimistic outlook. The key will be how effectively the company can leverage these factors to drive long-term growth.
Conclusion: Retail investors should watch for how the company manages its order backlog and adapts to market conditions. While short-term performance is lackluster, the strategic positioning offers potential for long-term gains.
Orlando, Florida--(Newsfile Corp. - May 15, 2024) - The LGL Group, Inc. (NYSE American: LGL) ("LGL," "LGL Group," or the "Company") announced today its financial results for the first quarter ended March 31, 2024.
First Quarter 2024
Total revenues decreased
$96,000 t o$888,000 for the three months ended March 31, 2024 from$984,000 for the three months ended March 31, 2023Income from continuing operations before income taxes and after non-controlling interests decreased
$193,000 t o$57,000 for the three months ended March 31, 2024 from$250,000 for the three months ended March 31, 2023Net income per diluted share decreased
$0.03 t o$0.00 for the three months ended March 31, 2024 from$0.03 for the three months ended March 31, 2023Cash and cash equivalents and marketable securities were
$40,890,000 as of March 31, 2024
Tim Foufas, Co-Chief Executive Officer, stated, "While our Electronics Instruments segment reported a decrease in revenue for the quarter compared to Q1 2023, we are pleased with the improvement in our order backlog and recent sales initiatives. With regard to our investments, we remain mindful of current U.S. Treasury yields as we continue to seek value add opportunities to grow shareholder value."
Consolidated Results
First quarter 2024 net income available to LGL Group common stockholders was
lower Net sales due to lower backlog as of Q4 2023
lower Net gains (losses) driven by mark-to-market losses and lower realized gains on Marketable securities; and
higher Engineering, selling and administrative costs related to an increase in salaries and wages.
The decrease was partially offset by higher Net investment income on investments in U.S. Treasury money market funds due to the repositioning of the portfolio into U.S. Treasury money market funds that occurred during 2023.
Gross Margin
Gross margin declined to
Backlog
As of March 31, 2024, our order backlog was
Liquidity
Our working capital metrics were as follows:
| (in thousands) | March 31, 2024 | December 31, 2023 | ||||||
| Current assets | $ | 41,687 | $ | 41,566 | ||||
| Less: Current liabilities | 516 | 474 | ||||||
| Working capital | $ | 41,171 | $ | 41,092 |
As of March 31, 2024, LGL Group had investments (classified within Cash and cash equivalents and Marketable securities) with a fair value of
About The LGL Group, Inc.
The LGL Group, Inc. ("LGL," "LGL Group," or the "Company") is a holding company engaged in services, merchant investment and manufacturing business activities. Precise Time and Frequency, LLC ("PTF") is 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. Lynch Capital International LLC is focused on the development of value through investments.
LGL was incorporated in 1928 under the laws of the State of Indiana, and in 2007, the Company was reincorporated under the laws of the State of Delaware as The LGL Group, Inc. We maintain our executive offices at 2525 Shader Road, Orlando, Florida 32804. Our telephone number is (407) 298-2000. Our Internet address is www.lglgroup.com. LGL common stock and warrants are traded on the NYSE American ("NYSE") under the symbols "LGL" and "LGL WS", respectively.
LGL Group's business strategy is primarily focused on growth through expanding new and existing operations across diversified industries. The Company's engineering and design origins date back to the early 1900s. In 1917, Lynch Glass Machinery Company ("Lynch Glass"), the predecessor of LGL Group, was formed and emerged in the late 1920s as a successful manufacturer of glass-forming machinery. Lynch Glass was then renamed Lynch Corporation ("Lynch") and was incorporated in 1928 under the laws of the State of Indiana. In 1946, Lynch was listed on the "New York Curb Exchange," the predecessor to the NYSE American. The Company has a had a long history of owning and operating various business in the precision engineering, manufacturing, and services sectors.
Cautionary Note 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 21E 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.
###
Contact:
The LGL Group, Inc.
Christopher Nossokoff
(407) 298-2000
info@lglgroup.com
The LGL Group, Inc.
Consolidated Statements of Operations
(Unaudited)
| | Three Months Ended March 31, | |||||||
| (in thousands, except share data) | 2024 | 2023 | ||||||
| Revenues: | ||||||||
| Net sales | $ | 392 | $ | 441 | ||||
| Net investment income | 499 | 198 | ||||||
| Net (losses) gains | (3 | ) | 345 | |||||
| Total revenues | 888 | 984 | ||||||
| Expenses: | ||||||||
| Manufacturing cost of sales | 204 | 192 | ||||||
| Engineering, selling and administrative | 605 | 542 | ||||||
| Total expenses | 809 | 734 | ||||||
| Income from continuing operations before income taxes | 79 | 250 | ||||||
| Income tax expense | 36 | 65 | ||||||
| Net income from continuing operations | 43 | 185 | ||||||
| Income (loss) from discontinued operations, net of tax | — | (28 | ) | |||||
| Net income | 43 | 157 | ||||||
| Less: Net income attributable to non-controlling interests | 22 | — | ||||||
| Net income attributable to LGL Group common stockholders | $ | 21 | $ | 157 | ||||
| Income (loss) per common share attributable to LGL Group common stockholders: | ||||||||
| Basic (a): | ||||||||
| Income from continuing operations | $ | 0.00 | $ | 0.03 | ||||
| Income (loss) from discontinued operations | — | (0.01 | ) | |||||
| Net income attributable to LGL Group common stockholders | $ | 0.00 | $ | 0.03 | ||||
| Diluted (a): | ||||||||
| Income from continuing operations | $ | 0.00 | $ | 0.03 | ||||
| Income (loss) from discontinued operations | — | (0.01 | ) | |||||
| Net income attributable to LGL Group common stockholders | $ | 0.00 | $ | 0.03 | ||||
| Weighted average shares outstanding: | ||||||||
| Basic | 5,352,937 | 5,352,937 | ||||||
| Diluted | 5,604,430 | 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.
The LGL Group, Inc.
Consolidated Balance Sheets
(Unaudited)
| (in thousands) | March 31, 2024 | December 31, 2023 | ||||||
| Assets: | ||||||||
| Current assets: | ||||||||
| Cash and cash equivalents | $ | 40,871 | $ | 40,711 | ||||
| Marketable securities | 19 | 22 | ||||||
| Accounts receivable, net of reserves of | 269 | 356 | ||||||
| Inventories, net | 213 | 204 | ||||||
| Prepaid expenses and other current assets | 315 | 273 | ||||||
| Total current assets | 41,687 | 41,566 | ||||||
| Right-of-use lease assets | 61 | 75 | ||||||
| Intangible assets, net | 52 | 57 | ||||||
| Deferred income tax assets | 151 | 152 | ||||||
| Total assets | $ | 41,951 | $ | 41,850 | ||||
| Liabilities: | ||||||||
| Total current liabilities | 516 | 474 | ||||||
| Non-current liabilities | 701 | 694 | ||||||
| Total liabilities | 1,217 | 1,168 | ||||||
| Stockholders' equity: | ||||||||
| Total LGL Group stockholders' equity | 38,792 | 38,762 | ||||||
| Non-controlling interests | 1,942 | 1,920 | ||||||
| Total stockholders' equity | 40,734 | 40,682 | ||||||
| Total liabilities and stockholders' equity | $ | 41,951 | $ | 41,850 |
The LGL Group, Inc.
Segment Results
(Unaudited)
| Three Months Ended March 31, | |||||||||||||||||
| (in thousands) | 2024 | 2023 | $ Change | % Change | |||||||||||||
| Revenues: | | ||||||||||||||||
| Electronic Instruments | $ | 392 | $ | 441 | $ | (49 | ) | -11.1 | % | ||||||||
| Merchant Investment | 289 | — | 289 | n/m | |||||||||||||
| Corporate | 207 | 543 | (336 | ) | -61.9 | % | |||||||||||
| Total revenues | 888 | 984 | (96 | ) | -9.8 | % | |||||||||||
| Expenses: | |||||||||||||||||
| Electronic Instruments | 390 | 369 | 21 | 5.7 | % | ||||||||||||
| Merchant Investment | 49 | — | 49 | n/m | |||||||||||||
| Corporate | 370 | 365 | 5 | 1.4 | % | ||||||||||||
| Total expenses | 809 | 734 | 75 | 10.2 | % | ||||||||||||
| Income (loss) from continuing operations before income taxes | |||||||||||||||||
| Electronic Instruments | 2 | 72 | (70 | ) | -97.2 | % | |||||||||||
| Merchant Investment | |||||||||||||||||
FAQ
What were LGL Group's total revenues for Q1 2024?
How did LGL Group's net income per diluted share change in Q1 2024?
What was the value of LGL Group's cash and marketable securities as of March 31, 2024?
What is the current order backlog for LGL Group?
What factors contributed to the decline in LGL Group's gross margin in Q1 2024?
How did LGL Group's income from continuing operations before taxes change in Q1 2024?
What was LGL Group's working capital as of March 31, 2024?
How did LGL Group's investments impact net investment income in Q1 2024?
