M-tron Industries(MPTI) - 2025 Q2 - Quarterly Results

Executive Summary Overall Performance and Outlook M-tron Industries reported strong Q2 2025 revenue growth and significant backlog increase, indicating robust demand and sustained performance - Interim CEO Cameron Pforr highlighted strong revenue growth and a significant increase in backlog, reflecting product value, pipeline strength, and growing market demand, positioning the company for sustained performance in H2 2025 and beyond[3] Key Financial Highlights Q2 2025 saw 12.5% revenue growth to $13.3 million and 35.0% backlog increase to $61.2 million, but diluted EPS decreased 15.9% Key Financial Highlights (Three and Six Months Ended June 30, in thousands) | U.S. GAAP Financial Measures | Three Months Ended June 30, 2025 (in thousands) | Three Months Ended June 30, 2024 (in thousands) | % Change | Six Months Ended June 30, 2025 (in thousands) | Six Months Ended June 30, 2024 (in thousands) | % Change | | :--------------------------- | :---------------------------------------------- | :---------------------------------------------- | :------- | :-------------------------------------------- | :-------------------------------------------- | :------- | | Revenues | $13,282 | $11,808 | 12.5% | $26,014 | $22,993 | 13.1% | | Gross margin | 43.6% | 46.6% | -6.4% | 43.0% | 44.7% | -3.7% | | Net income | $1,560 | $1,744 | -10.6% | $3,190 | $3,230 | -1.2% | | Net income per diluted share | $0.53 | $0.63 | -15.9% | $1.09 | $1.16 | -6.2% | | Non-GAAP Financial Measures (a) | | | | | | | | Adjusted EBITDA | $2,419 | $2,523 | -4.1% | $4,921 | $4,785 | 2.8% | - Revenues increased 12.5%, or $1.5 million, to $13.3 million for the three months ended June 30, 2025, from $11.8 million in the prior year[4] - Net income per diluted share decreased 15.9%, or $0.10, to $0.53 for the three months ended June 30, 2025, from $0.63 in the prior year[4] - Backlog increased 35.0%, or $15.9 million, to $61.2 million as of June 30, 2025, from $45.3 million as of June 30, 2024[4] Results from Operations Three Months Ended June 30, 2025 (Q2 2025) In Q2 2025, M-tron Industries saw revenue growth driven by defense program shipments, but experienced declines in gross margin, net income, and Adjusted EBITDA due to product mix, tariffs, and increased operating expenses Revenue - Revenue for Q2 2025 was $13.3 million, an increase from $11.8 million in Q2 2024, primarily driven by strong defense program product and solution shipments[5] Gross Margin - Gross margin decreased to 43.6% in Q2 2025 from 46.6% in Q2 2024, mainly due to product mix and tariff impacts, partially offset by higher revenues[6] Net Income & EPS - Net income was $1.6 million ($0.53 per diluted share) in Q2 2025, down from $1.7 million ($0.63 per diluted share) in Q2 2024, attributed to lower gross margins and higher operating expenses, including increased R&D, sales commissions, and administrative costs[7] Adjusted EBITDA - Adjusted EBITDA decreased to $2.4 million in Q2 2025 from $2.5 million in Q2 2024, primarily due to lower gross margins and increased Engineering, selling, and administrative expenses[8] Six Months Ended June 30, 2025 (YTD 2025) For the first six months of 2025, M-tron Industries achieved revenue growth, but experienced a slight decline in net income and diluted EPS, alongside a modest increase in Adjusted EBITDA, influenced by similar factors as the quarterly results Revenue - Revenue for the six months ended June 30, 2025, was $26.0 million, up from $23.0 million in the prior year, driven by continued strong defense program product and solution shipments[9] Gross Margin - Gross margin for the six months ended June 30, 2025, was 43.0%, a decrease from 44.7% in the prior year, primarily due to product mix and tariff impacts, partially offset by higher revenues[9] Net Income & EPS - Net income was $3.2 million ($1.09 per diluted share) for the six months ended June 30, 2025, compared to $3.2 million ($1.16 per diluted share) in the prior year, due to lower gross margins and higher operating expenses from increased R&D, sales commissions, and administrative costs[10] Adjusted EBITDA - Adjusted EBITDA increased to $4.9 million for the six months ended June 30, 2025, from $4.8 million in the prior year, primarily due to a substantial increase in revenue, partially offset by reduced gross margins and higher operating expenses[11] Backlog Backlog Overview M-tron Industries reported a significant increase in backlog to $61.2 million as of June 30, 2025, reflecting broad demand across its product lines, including aerospace, defense, avionics, and space industries - Backlog reached $61.2 million as of June 30, 2025, a 35.0% increase from $45.3 million as of June 30, 2024, and also up from $47.2 million as of December 31, 2024[4][12] - The increase in backlog is attributed to broad demand for products, including continued purchasing under large aerospace and defense programs, new program orders, and a recent uptick in avionics and space industry orders[12] Investor Call Details Conference Call Information M-tron Industries will host a conference call on August 13, 2025, to discuss Q2 2025 results, with dial-in details provided for participants and an archive available online - Management will host a conference call on Wednesday, August 13, 2025, at 10:30 a.m. Eastern Time to discuss Q2 2025 results[13] Investor Call Dial-in Details | Detail | Value | | :----------------- | :------------- | | Toll-Free Dial-in | (800) 715-9871 | | Toll Dial-in Number| +1 (646) 307-1963 | | Conference ID | 4709075 | - An archive of the call and the earnings release will be available on the Investor Relations section of Mtron's website at ir.mtron.com[13] About M-tron Industries, Inc. Company Overview M-tron Industries is a U.S.-based engineering-centric designer and manufacturer of highly engineered, high-reliability frequency and spectrum control products and solutions for the aerospace, defense, avionics, and space industries, providing comprehensive customer support globally - M-tron Industries, Inc. designs, manufactures, and markets highly engineered, high reliability frequency and spectrum control products and solutions[14] - The company is engineering-centric, providing close support to customers throughout the entire product life cycle, including design, prototyping, production, and upgrades[14] - Mtron has design and manufacturing facilities in Orlando, Florida, and Yankton, South Dakota, a sales office in Hong Kong, and a manufacturing facility in Noida, India[14] Cautionary Note Concerning Forward-Looking Statements Forward-Looking Statements Disclaimer This section outlines the nature of forward-looking statements within the press release, emphasizing that they are based on current expectations and projections, subject to risks and uncertainties, and Mtron undertakes no obligation to update them - The press release contains forward-looking statements regarding financial impact, condition, results, strategy, and needs, identified by words like 'believe,' 'expect,' 'anticipate,' and similar expressions[15] - These statements are based on current expectations and projections but are subject to inaccurate assumptions, risks, and uncertainties, as detailed in SEC filings, including the 'Risk Factors' in the Company's Form 10-K[16] - Mtron undertakes no obligation to update or revise any forward-looking statements, and readers are cautioned not to place undue reliance on them, with protection claimed under the Private Securities Litigation Reform Act of 1995[17] Contact Information Investor Relations Contact For investor inquiries, M-tron Industries provides an email contact for Investor Relations and lists Cameron Pforr as the Interim Chief Executive Officer - Investor Relations can be reached via email at ir@mtron.com[18] - Cameron Pforr is listed as the Interim Chief Executive Officer[18] Supplemental Financial Data Quarterly Summary This section provides a historical quarterly summary of key financial metrics, including revenues, gross margin, net income, and Adjusted EBITDA, from Q1 2022 through Q2 2025, along with year-over-year percentage changes Quarterly Financial Summary (in thousands) | (in thousands) | Q1 2022 | Q2 2022 | Q3 2022 | Q4 2022 | Q1 2023 | Q2 2023 | Q3 2023 | Q4 2023 | Q1 2024 | Q2 2024 | Q3 2024 | Q4 2024 | Q1 2025 | Q2 2025 | | :------------- | :------ | :------ | :------ | :------ | :------ | :------ | :------ | :------ | :------ | :------ | :------ | :------ | :------ | :------ | | Revenues | $7,691 | $7,064 | $8,417 | $8,673 | $9,367 | $10,140 | $10,888 | $10,773 | $11,185 | $11,808 | $13,214 | $12,805 | $12,732 | $13,282 | | Y/Y | | | | | 21.8% | 43.5% | 29.4% | 24.2% | 19.4% | 16.4% | 21.4% | 18.9% | 13.8% | 12.5% | | Gross margin | 37.3% | 37.5% | 32.4% | 35.7% | 34.1% | 41.6% | 42.8% | 43.6% | 42.7% | 46.6% | 47.8% | 47.2% | 42.5% | 43.6% | | Y/Y | | | | | -8.6% | 10.9% | 32.1% | 22.1% | 25.2% | 12.0% | 11.7% | 8.3% | -0.5% | -6.4% | | Net income (a) | $619 | $486 | $503 | $190 | $553 | $1,277 | $1,586 | $73 | $1,486 | $1,744 | $2,267 | $2,139 | $1,630 | $1,560 | | Y/Y | | | | | -10.7% | 162.8% | 215.3% | -61.6% | 168.7% | 36.6% | 42.9% | 2830.1% | 9.7% | -10.6% | | Adjusted EBITDA (b) | $1,177 | $841 | $876 | $1,114 | $1,028 | $1,931 | $2,336 | $2,397 | $2,262 | $2,523 | $3,300 | $3,056 | $2,502 | $2,419 | | Y/Y | | | | | -12.7% | 129.6% | 166.7% | 115.2% | 120.0% | 30.7% | 41.3% | 27.5% | 10.6% | -4.1% | Condensed Consolidated Statements of Operations This table presents the unaudited condensed consolidated statements of operations for the three and six months ended June 30, 2025, and 2024, detailing revenues, costs and expenses, operating income, other income/expense, income before taxes, net income, and earnings per share Condensed Consolidated Statements of Operations (Unaudited, in thousands, except share data) | (in thousands, except share data) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Revenues | $13,282 | $11,808 | $26,014 | $22,993 | | Costs and expenses: | | | | | | Manufacturing cost of sales | 7,490 | 6,307 | 14,816 | 12,713 | | Engineering, selling and administrative | 3,948 | 3,394 | 7,341 | 6,384 | | Total costs and expenses | 11,438 | 9,701 | 22,157 | 19,097 | | Operating income | 1,844 | 2,107 | 3,857 | 3,896 | | Other income (expense): | | | | | | Interest income, net | 124 | 44 | 235 | 76 | | Other income (expense), net | 27 | (5) | 17 | 37 | | Total other income, net | 151 | 39 | 252 | 113 | | Income before income taxes | 1,995 | 2,146 | 4,109 | 4,009 | | Income tax expense | 435 | 402 | 919 | 779 | | Net income | $1,560 | $1,744 | $3,190 | $3,230 | | Income per common share: | | | | | | Basic | $0.55 | $0.64 | $1.12 | $1.19 | | Diluted | $0.53 | $0.63 | $1.09 | $1.16 | | Weighted average shares outstanding: | | | | | | Basic | 2,853,383 | 2,728,599 | 2,848,419 | 2,723,293 | | Diluted | 2,934,594 | 2,779,802 | 2,931,053 | 2,783,739 | Condensed Consolidated Balance Sheets This table provides the unaudited condensed consolidated balance sheets as of June 30, 2025, and December 31, 2024, detailing assets, liabilities, and stockholders' equity Condensed Consolidated Balance Sheets (Unaudited, in thousands) | (in thousands) | June 30, 2025 | December 31, 2024 | | :---------------------------------- | :------------ | :---------------- | | Assets: | | | | Current assets: | | | | Cash and cash equivalents | $15,529 | $12,641 | | Accounts receivable, net | 6,261 | 6,842 | | Inventories, net | 9,116 | 9,509 | | Prepaid expenses and other current assets | 874 | 760 | | Total current assets | 31,780 | 29,752 | | Property, plant and equipment, net | 5,939 | 5,061 | | Right-of-use lease asset | 242 | 9 | | Intangible assets, net | 40 | 40 | | Deferred income tax asset | 1,691 | 1,623 | | Other assets | — | 3 | | Total assets | $39,692 | $36,488 | | Liabilities: | | | | Total current liabilities | 4,689 | 5,216 | | Non-current liabilities | 190 | — | | Total liabilities | 4,879 | 5,216 | | Total stockholders' equity | 34,813 | 31,272 | | Total liabilities and stockholders' equity | $39,692 | $36,488 | Non-GAAP Financial Measures Reconciliation This section defines M-tron Industries' non-GAAP financial measures, specifically Adjusted EBITDA, and provides reconciliations to the most comparable GAAP measures for both quarterly and year-to-date periods, highlighting adjustments made for a clearer operational understanding - The Company uses non-GAAP financial measures, such as Adjusted EBITDA, to provide a more complete understanding of underlying operational results and trends, noting they may not be comparable to similarly-named measures from other companies[26][27] - Adjusted EBITDA is derived by excluding interest income/expense, depreciation, amortization, non-cash stock-based compensation, and other discrete items from Income before income taxes[27][28] Reconciliation of GAAP Income Before Income Taxes to Non-GAAP Adjusted EBITDA (in thousands) | (in thousands, except share data) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Income before income taxes | $1,995 | $2,146 | $4,109 | $4,009 | | Adjustments: | | | | | | Interest income | (124) | (44) | (235) | (76) | | Depreciation | 270 | 220 | 520 | 439 | | Amortization | — | — | — | 5 | | Total adjustments | 146 | 176 | 285 | 368 | | EBITDA | 2,141 | 2,322 | 4,394 | 4,377 | | Non-cash stock compensation | 278 | 201 | 527 | 408 | | Adjusted EBITDA | $2,419 | $2,523 | $4,921 | $4,785 | Quarterly Reconciliation of Adjusted EBITDA to Income before income taxes (in thousands) | (in thousands) | Q1 2022 | Q2 2022 | Q3 2022 | Q4 2022 | Q1 2023 | Q2 2023 | Q3 2023 | Q4 2023 | Q1 2024 | Q2 2024 | Q3 2024 | Q4 2024 | Q1 2025 | Q2 2025 | | :------------- | :------ | :------ | :------ | :------ | :------ | :------ | :------ | :------ | :------ | :------ | :------ | :------ | :------ | :------ | | Revenues | $7,691 | $7,064 | $8,417 | $8,673 | $9,367 | $10,140 | $10,888 | $10,773 | $11,185 | $11,808 | $13,214 | $12,805 | $12,732 | $13,282 | | Income before income taxes | $794 | $592 | $614 | $595 | $719 | $1,582 | $2,046 | $53 | $1,863 | $2,146 | $3,008 | $2,758 | $2,114 | $1,995 | | Adjustments: | | | | | | | | | | | | | | | | Interest expense (income) | 3 | 2 | 1 | 5 | 2 | 5 | (1) | (13) | (32) | (44) | (63) | (104) | (111) | (124) | | Depreciation | 148 | 165 | 173 | 185 | 195 | 190 | 192 | 220 | 219 | 220 | 278 | 251 | 250 | 270 | | Amortization | 13 | 14 | 13 | 14 | 13 | 14 | 13 | 13 | 5 | — | — | — | — | — | | Total adjustments | 164 | 181 | 187 | 204 | 210 | 209 | 204 | 220 | 192 | 176 | 215 | 147 | 139 | 146 | | EBITDA | 958 | 773 | 801 | 799 | 929 | 1,791 | 2,250 | 273 | 2,055 | 2,322 | 3,223 | 2,905 | 2,253 | 2,141 | | Non-cash stock compensation | 219 | 68 | 75 | 96 | 71 | 140 | 86 | 2,124 | 207 | 201 | 77 | 151 | 249 | 278 | | Excess Spin-off costs | — | — | — | 219 | 28 | — | — | — | — | — | — | — | — | — | | Adjusted EBITDA | $1,177 | $841 | $876 | $1,114 | $1,028 | $1,931 | $2,336 | $2,397 | $2,262 | $2,523 | $3,300 | $3,056 | $2,502 | $2,419 | | Adjusted EBITDA margin | 15.3% | 11.9% | 10.4% | 12.8% | 11.0% | 19.0% | 21.5% | 22.3% | 20.2% | 21.4% | 25.0% | 23.9% | 19.7% | 18.2% |