Greg Anderson, LGL’s President and Chief Executive Officer, said, “2013 was a challenging year which led us to take several significant actions as a result of our strategic review process. However, during the year, we have experienced an uptick in quote activity with our clients, which has also carried into the new year. As a result, we have increased our investment in these market driven projects which will impact our top and bottom line in the future.”Total revenues for Q4 2013 were $5.7 million, a decrease of 6.6% from the Q3 2013 revenues of $6.1 million and a decrease of 24.9% from revenues for Q4 2012. Net loss for Q4 2013 was ($2.0) million, or ($0.76) per share, compared to a net loss of ($1.2) million, or ($0.46) per share, for Q3 2013, and a net loss of ($0.2) million, or ($0.08) per share for Q4 2012. Adjusted pre-tax net loss for Q4 2013 was ($1.3) million, or ($0.50) per share, compared to ($0.2) million, or ($0.08) per share for the same period in 2012. Backlog Improved to $8.6M; Capital Position Remains Strong The Company’s order backlog improved by 2.4% quarter over quarter with an order backlog of $8.6 million at December 31, 2013, compared to $8.4 million at September 30, 2013. In addition, total cash, cash equivalents and restricted cash was $8.7 million, or $3.35 per share, at December 31, 2013, compared to $10.1 million, or $3.90 per share, at December 31, 2012. The decrease of $1.4 million was primarily due to capital expenditures of $0.4 million, and cash used in operating activities of $0.7 million, which included approximately $0.3 million of cash used related to restructuring activities, which were substantially completed in Q4 2013. Adjusted working capital (accounts receivable, net, plus inventory, net, less accounts payable) improved to $5.9 million at December 31, 2013, compared to $6.6 million at September 30, 2013, due to managing working capital to match operating activity levels.
Results of Strategic Review ProcessAs first announced on June 13, 2013, the Company’s Board of Directors formed a special committee (the “Special Committee”) to conduct a strategic review of opportunities that are economically attractive to stockholder value creation. During Q3 2013, the Special Committee assessed alternatives to grow stockholder value and determined that the best course was to pursue organic growth led by changes to capital allocation. As a result, the Company has implemented a number of significant actions:
- On August 6, 2013, a distribution of warrants was made to the Company’s stockholders in order to return a portion of the Company’s future value to stockholders.
- On October 1, 2013, Mr. Michael Ferrantino, Sr., a 40-year veteran of the RF and microwave industry, was appointed as Vice Chairman of the Company’s Board of Directors and Executive Chairman of MtronPTI.
- On October 17, 2013, management initiated a restructuring plan to realign our customer support operations across all of our locations with a target of reducing structural costs by at least 10%, which was substantially completed during Q4 2013.
- On January 31, 2014, MtronPTI acquired certain of Trilithic Inc.’s filter product line assets, which included intellectual property and equipment for fixed and tunable frequency filter products used in cellular, aerospace and defense, and other wireless applications.
- On March 6, 2014, MtronPTI announced the appointment of Mr. Conrad Jordan, who has more than 20-years’ experience in RF and microwave new product development and engineering for both components and subsystems, as Timing Products Vice President and Business Center Manager for MtronPTI, with leadership responsibility for research and development, and business results of the timing products division.
Investor’s Conference Call Scheduled for Tuesday, March 25, 2014, at 10:00 A.M. ETAn investor conference call is scheduled for Tuesday, March 25, 2014, at 10:00 a.m. ET. The purpose of the call is to discuss the Company’s full-year and Q4 2013 earnings results, current business activities and strategy. The Company’s President and Chief Executive Officer, Greg Anderson, will host the audio event. Participants can access the conference call at (800) 894-5910 for domestic callers and (785) 424-1052 for international callers. The conference ID is LGLIR0325. 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 devices are used extensively in electronic systems for military applications, avionics, earth-orbiting satellites, medical devices, instrumentation, industrial devices and global positioning systems. They are also used in infrastructure equipment for the telecommunications and network equipment industries. The Company has operations in Orlando, Florida, Yankton, South Dakota, Yantai, China and Noida, India, and sales offices in Sacramento, California, Eindhoven, The Netherlands, Hong Kong and Shanghai, China. For more information on the Company and its products and services, contact R. LaDuane Clifton, Chief Financial Officer, The LGL Group, Inc., 2525 Shader Rd., Orlando, Florida 32804, (407) 298-2000, or visit the Company’s Web site: www.lglgroup.com. Caution Concerning Forward Looking Statements This document includes certain "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are based on management's current expectations and are subject to uncertainty and changes in circumstances. Actual results may differ materially from these expectations due to changes in global political, economic, business, competitive, market and regulatory factors. More detailed information about those factors is contained in The LGL Group's filings with the U.S. Securities and Exchange Commission.
|THE LGL GROUP, INC. Condensed Consolidated Statements of Operations - UNAUDITED (Dollars in Thousands, Except Per Share Amounts)|
|For the year ended December 31,||2013||2012|
|Cost and expenses:|
|Manufacturing cost of sales||19,374||21,966|
|Engineering, selling and administrative||10,343||9,522|
|Total other expense||(107||)||(62||)|
|LOSS BEFORE INCOME TAXES||(4,271||)||(1,844||)|
|Income tax (provision) benefit||(3,948||)||524|
|Weighted average number of shares used in basic and diluted EPS calculation.||2,595,362||2,593,741|
|BASIC AND DILUTED NET LOSS PER COMMON SHARE.||$||(3.17||)||$||( 0.51||)|
|For the quarter ended December 31,||2013||2012|
|Cost and expenses:|
|Manufacturing cost of sales||4,470||5,300|
|Engineering, selling and administrative||2,509||2,578|
|Total other (expense) income||(60||)||37|
|LOSS BEFORE INCOME TAXES||(1,947||)||(198||)|
|Income tax provision||(26||)||--|
|Weighted average number of shares used in basic and diluted EPS calculation.||2,585,729||2,586,181|
|BASIC AND DILUTED NET LOSS PER COMMON SHARE.||$||(0.76||)||$||(0.08||)|
|THE LGL GROUP, INC. Condensed Consolidated Balance Sheets – UNAUDITED (Dollars in Thousands)|
|December 31, 2013||December 31, 2012|
|Cash and cash equivalents||$||7,183||$||8,625|
|Accounts receivable, less allowances of $42 and $79, respectively||3,237||4,350|
|Deferred income taxes||--||1,114|
|Prepaid expenses and other current assets||405||665|
|Total current assets||16,954||21,603|
|Property, plant and equipment, net||3,986||4,707|
|Other assets, net||323||3,283|
|LIABILITIES AND STOCKHOLDERS’ EQUITY|
|Total Liabilities and Stockholders’ Equity||$||21,263||$||29,593|
Reconciliation of 2013 GAAP Net Loss to Non-GAAP Adjusted Pre-Tax Loss
|For the year ended December 31, 2013||Dollars (000’s)||Amounts Per Share|
|Net loss and diluted loss per share||$||(8,219||)||$||(3.17||)|
|Add: income tax provision||3,948||1.52|
|Add: restructuring charges||648||0.25|
|Adjusted pre-tax loss and adjusted pre-tax loss per share||$||(3,623||)||$||(1.40||)|
|Weighted average number of shares used in basic and diluted EPS calculation||2,595,362|
|For the quarter ended December 31, 2013||Dollars (000’s)||Amounts Per Share|
|Net loss and diluted loss per share||$ (1,973)||$ (0.76)|
|Add: income tax provision||26||0.01|
|Add: restructuring charges||648||0.25|
|Adjusted pre-tax loss and adjusted pre-tax loss per share||$ (1,299)||$ (0.50)|
|Weighted average number of shares used in basic and|
|diluted EPS calculation||2,585,729|