The LGL (LGL) - 2024 Q3 - Quarterly Report

Revenue Growth - Total revenues increased by $201, or 20.6$978,000 for Q3 2023 to $1,179,000 for Q3 2024, primarily driven by a$212, or 48.4%, increase in net sales [110]. - Net sales for the nine months ended September 30, 2024, increased by $291, or 22.7$1,282,000 in 2023 to $1,573,000 in 2024, attributed to higher product shipments [116]. - For the three months ended September 30, 2024, net sales in the Electronic Instruments segment reached$650 million, reflecting a $212 million or 48.4$438 million in the same period of 2023 [123]. Investment Income - Net investment income rose by $551, or 54.2$1,017,000 for the nine months ended September 30, 2023, to $1,568,000 for the same period in 2024, due to investments in higher yielding U.S. Treasury money market funds [116]. - Net investment income in the Merchant Investment segment for the three months ended September 30, 2024, was$318 million, a $31 million or 10.8$287 million in the same period of 2023 [128]. - For the nine months ended September 30, 2024, net investment income in the Merchant Investment segment was $922 million, a$380 million or 70.1% increase from $542 million in the same period of 2023 [130]. Expenses and Costs - Total expenses increased by$315, or 13.3%, from $2,366,000 for the nine months ended September 30, 2023, to$2,681,000 for the same period in 2024 [118]. - Manufacturing cost of sales for the nine months ended September 30, 2024, increased by $191, or 32.1$595,000 in 2023 to $786,000 in 2024, consistent with revenue growth and sales of higher-cost products [118]. - Income from continuing operations before income taxes in the Electronic Instruments segment decreased by$26 million or 37.1%, from $70 million to$44 million, primarily due to an $173 million or 88.7$95, or 70.4%, from $135,000 for the nine months ended September 30, 2023, to$230,000 for the same period in 2024 [116]. - Income from continuing operations before income taxes increased by $137, or 43.2$317,000 for the nine months ended September 30, 2023, to $454,000 for the same period in 2024 [118]. - Income from continuing operations before income taxes in the Merchant Investment segment increased by$5 million or 2.2%, from $223 million to$228 million [129]. Taxation - Income tax expense for the nine months ended September 30, 2024, increased by $28, or 21.2$132,000 in 2023 to $160,000 in 2024, primarily due to the increase in income from continuing operations [120]. - Net income attributable to non-controlling interests increased by$42, or 190.9%, from $22,000 for the nine months ended September 30, 2023, to$64,000 for the same period in 2024, primarily due to the consolidation of LGL Systems [120]. Order Backlog - As of September 30, 2024, the order backlog increased to $505 million, a rise of$362 million or 253.1% from $143 million as of December 31, 2023 [121]. Cash Flow and Liquidity - Cash and cash equivalents as of September 30, 2024, were$41,602 million, compared to $40,711 million as of December 31, 2023 [139]. - Cash provided by operating activities for the period ended September 30, 2024, was$891 million, an increase from $454 million in the same period of 2023 [140]. - Current assets as of September 30, 2024, were$42,274, while current liabilities were $739, resulting in working capital of$41,535, an increase from $41,092 as of December 31, 2023 [142]. Dividends and Capital Policy - The company maintains a policy of not paying cash dividends, with no dividends paid since January 30, 1989, to support long-term growth objectives [145]. - Existing cash, cash equivalents, and marketable securities are expected to provide sufficient liquidity for ongoing working capital and capital expenditure requirements for the next 12 months [144]. Financial Controls and Legal Proceedings - The company’s disclosure controls and procedures were deemed effective as of September 30, 2024, following an evaluation by management [150]. - No changes in internal control over financial reporting were reported during the quarter ended September 30, 2024 [151]. - The company is not aware of any material pending legal proceedings, other than ordinary routine litigation incidental to its business [151].