The LGL (US:LGL)2025-05-15 20:51PART I. FINANCIAL INFORMATION Item 1. Financial Statements Total assets increased to $43.3 million, with revenues at $918 thousand, but net income attributable to common stockholders shifted to a $6 thousand loss due to higher expenses Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Total current assets | $42,820 | $42,642 | | Total assets | $43,302 | $43,145 | | Total current liabilities | $1,013 | $904 | | Total liabilities | $2,040 | $1,905 | | Total stockholders' equity | $41,262 | $41,240 | Condensed Consolidated Statement of Operations Highlights (in thousands) | Account | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net sales | $498 | $392 | | Net investment income | $417 | $499 | | Total revenues | $918 | $888 | | Total expenses | $877 | $809 | | Income from operations before income taxes | $41 | $79 | | Net income | $13 | $43 | | Net (loss) income attributable to LGL Group | $(6) | $21 | Condensed Consolidated Statement of Cash Flows Highlights (in thousands) | Account | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $340 | $160 | | Cash and cash equivalents at end of period | $41,925 | $40,871 | Notes to the Condensed Consolidated Financial Statements Details company structure, segment reporting, related party transactions, a 68.3% effective tax rate, and key foreign revenue sources - The company operates through two main business segments: Electronic Instruments (via subsidiary PTF) and Merchant Investment (via subsidiary Lynch Capital)3536 Segment Profit (Loss) for Q1 2025 (in thousands) | Segment | Total Revenues | Segment Profit (Loss) | | :--- | :--- | :--- | | Electronic Instruments | $498 | $19 | | Merchant Investment | $247 | $153 | | Corporate | $173 | $(131) | | Consolidated | $918 | $41 | - The effective tax rate for Q1 2025 was 68.3%, compared to 46.2% in Q1 2024, primarily due to uncertain tax positions and state income taxes85 Top Foreign Revenues by Country for Q1 2025 (in thousands) | Country | Q1 2025 Revenue | | :--- | :--- | | Spain | $100 | | Norway | $34 | | United Kingdom | $32 | | Australia | $30 | | Total Foreign Revenues | $250 | Management's Discussion and Analysis of Financial Condition and Results of Operations Total revenue increased 3.4% driven by Electronic Instruments, offset by lower investment income, while expenses rose 8.4%, impacting pre-tax income, with strong liquidity maintained Results of Operations - Consolidated Consolidated revenues rose 3.4% to $918 thousand, but expenses grew 8.4%, leading to a 48.1% drop in pre-tax income and a $6 thousand net loss Consolidated Results of Operations (in thousands) | Metric | Q1 2025 | Q1 2024 | $ Change | % Change | | :--- | :--- | :--- | :--- | :--- | | Total revenues | $918 | $888 | $30 | 3.4% | | Total expenses | $877 | $809 | $68 | 8.4% | | Income from operations before income taxes | $41 | $79 | $(38) | -48.1% | | Net (loss) income attributable to LGL Group | $(6) | $21 | $(27) | -128.6% | - The revenue increase was driven by a $106 (27.0%) increase in Net sales, primarily due to higher backlog as of December 31, 2024110 - The increase in total expenses was driven by a $33 (16.2%) increase in Manufacturing costs of sales and a $35 (5.8%) increase in Engineering, selling and administrative costs116 - Order backlog was $295 thousand as of March 31, 2025, a decrease of 12.2% from December 31, 2024, and 13.5% from March 31, 2024115 Results of Operations - Operating Segments Electronic Instruments pre-tax income surged 850% to $19 thousand, while Merchant Investment pre-tax income declined 36.3% to $153 thousand, and Corporate loss narrowed Electronic Instruments Segment Performance (in thousands) | Metric | Q1 2025 | Q1 2024 | $ Change | % Change | | :--- | :--- | :--- | :--- | :--- | | Net sales | $498 | $392 | $106 | 27.0% | | Total expenses | $479 | $390 | $89 | 22.8% | | Income from operations before income taxes | $19 | $2 | $17 | 850.0% | Merchant Investment Segment Performance (in thousands) | Metric | Q1 2025 | Q1 2024 | $ Change | % Change | | :--- | :--- | :--- | :--- | :--- | | Net investment income | $247 | $289 | $(42) | -14.5% | | Total expenses | $94 | $49 | $45 | 91.8% | | Income from operations before income taxes | $153 | $240 | $(87) | -36.3% | Liquidity and Capital Resources Liquidity remains strong with cash and equivalents at $41.9 million, operating cash flow improved to $340 thousand, and no dividends are expected Cash Flow and Working Capital (in thousands) | Metric | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Cash and cash equivalents | $41,925 | $41,585 | | Working capital | $41,807 | $41,738 | | Metric (Q1) | 2025 | 2024 | | Cash provided by operating activities | $340 | $160 | - The company has not paid a cash dividend since 1989 and does not expect to pay one in the foreseeable future, prioritizing long-term growth objectives127 Quantitative and Qualitative Disclosures About Market Risk This section on market risk disclosures is not applicable to the company - The company states that quantitative and qualitative disclosures about market risk are not applicable131 Controls and Procedures Disclosure controls and procedures were deemed effective as of March 31, 2025, with no material changes to internal control over financial reporting - Based on an evaluation as of March 31, 2025, the Principal Executive Officer and Principal Financial Officer concluded that the company's disclosure controls and procedures were effective133 - No changes in internal control over financial reporting occurred during the quarter ended March 31, 2025, that have materially affected, or are reasonably likely to materially affect, the company's internal control134 PART II. OTHER INFORMATION Legal Proceedings The company is not involved in any material pending legal proceedings beyond routine business litigation - The company reports no material pending legal proceedings outside of routine litigation incidental to its business137 Risk Factors No material changes to risk factors have occurred since the 2024 Annual Report on Form 10-K - For a discussion of potential risks and uncertainties, the report refers to the Risk Factors section in the 2024 Annual Report on Form 10-K138 Other Information The 2025 Annual Meeting is set for June 2, 2025, with no Rule 10b5-1 trading arrangements adopted or terminated by directors or officers - The 2025 Annual Meeting of Stockholders is scheduled for June 2, 2025141 - During Q1 2025, no directors or officers adopted or terminated a Rule 10b5-1 trading arrangement140 Exhibits This section details exhibits filed with the Form 10-Q, including officer certifications and Inline XBRL documents