The LGL (LGL) - 2025 Q2 - Quarterly Results

Company Announcements & Strategic Updates The LGL Group announced a share repurchase program, provided warrant exercise details, scheduled an investor conference, updated on the MGHL acquisition, and introduced new AI-driven initiatives Shareholder Actions The LGL Group announced the commencement of a share repurchase program and provided details regarding the exercise of its warrants, with approximately 45,000 shares already issued Share Repurchase Program The Board of Directors authorized a share repurchase of $500,000 to $700,000 of common stock, not exceeding 100,000 shares, expected to begin this quarter - Board authorized share repurchase of $500,000 to $700,000 of common stock[1] - Repurchase not expected to exceed 100,000 shares and is anticipated to begin this quarter[1] Warrant Exercise LGL Group's warrants are exercisable through November 17, 2025, at a strike price of $4.75 per share, with an oversubscription privilege available from October 16, 2025, and approximately 45,000 shares have been issued to date - Warrants are exercisable through November 17, 2025, at a strike price of $4.75 per share[2][11] - Approximately 45,000 shares have been issued from the exercise of warrants to date[3] - An oversubscription privilege is available to warrant holders starting October 16, 2025[11] Investor Relations LGL Group is scheduled to present at the Sidoti Small Cap Virtual Conference on September 18, 2025 Sidoti Small Cap Conference Presentation LGL Group will present at the Sidoti Small Cap Virtual Conference on Thursday, September 18, 2025, at 11:30 a.m. ET - LGL Group will present at the Sidoti Small Cap Virtual Conference on Thursday, September 18, 2025, at 11:30 a.m. ET[4] Strategic Investments & Acquisitions LGL Group provided an update on its pending acquisition of Morgan Group Holding Co. (MGHL), detailing MGHL's business and anticipated leadership changes upon closing Morgan Group Holding Co. (MGHL) Acquisition Update The purchase of 1,000,000 newly issued shares of Morgan Group Holding Co. (MGHL) for $2.00 per share remains pending final agreements and approvals, with an expected closing in the third quarter of 2025 - LGL Group's purchase of 1,000,000 newly issued shares of Morgan Group Holding Co. (MGHL) for $2.00 per share is pending final agreements and approvals[6] - The transaction is expected to close in the third quarter of 2025[6] MGHL Business Overview MGHL, through its subsidiary G.research, LLC (G.R), offers brokerage, underwriting, and institutional research services, managing over $5.0 billion in private client assets across more than 1,000 accounts - MGHL, through its wholly owned subsidiary G.research, LLC (G.R), provides brokerage, underwriting, and institutional research services[7] - G.R manages over $5.0 billion of private client assets in over 1,000 accounts[7] MGHL Leadership Changes Upon the closing of the MGHL acquisition, Herve Francois will join as Chairman and CEO, and Chris Nossokoff as CFO, while G.R.'s current leadership will remain in place - Once closed, Herve Francois will join MGHL as Chairman and Chief Executive Officer, and Chris Nossokoff as Chief Financial Officer[8] - G.R. will continue to be led by Vincent Amabile as President and Joseph Fernandez as Financial Operations Principal and Controller[8] New Business Initiatives LGL Group's PTF division, P3 Logistic Solutions LLC, is developing AI-driven tactical edge device prototypes for agricultural applications, adapting defense technology, with no material benefits expected in 2025 but value anticipated in the medium term P3 Logistic Solutions AI-Driven Edge Devices P3 Logistic Solutions LLC, part of the PTF division, is developing AI-driven tactical edge device prototypes for modern agriculture, adapting defense technology, with field tests planned and material benefits anticipated in the medium term, not 2025 - P3 Logistic Solutions LLC (PTF division) is developing new AI-driven tactical edge device prototypes[9] - The technology, originally for U.S. Department of Defense use, is being adapted for modern agriculture, with field tests planned for precision crop monitoring, smart irrigation, and autonomous asset tracking[9][10] - No material benefits from these new initiatives are expected in 2025, but value is anticipated in the medium term[12] Financial Performance Overview LGL Group reported a net loss for Q2 and the first six months of 2025, with declining revenues and gross margin, but an increased backlog and stable working capital Q2 2025 Consolidated Financial Highlights LGL Group reported a net loss of ($51,000) or ($0.01) per diluted share for Q2 2025, a significant decline from Q2 2024, with total revenues decreasing by 13.5% year-over-year due to lower net sales and investment income | Metric | Q2 2025 | Q2 2024 | % Change | | :--------------------------------- | :------ | :------ | :------- | | Revenues | $924 | $1,068 | -13.5% | | Gross margin | 57.0% | 59.7% | -4.5% | | Net (loss) income | $(51) | $137 | -137.2% | | Net (loss) income per diluted share | $(0.01) | $0.02 | -138.1% | - The decrease in net income was primarily due to lower net sales from reduced product shipments and lower net investment income from U.S. Treasury money market funds due to lower yields[14][19] Key Financial Metrics Analysis An analysis of key financial metrics for Q2 and the first six months of 2025 reveals declines in revenues and net income, a decrease in gross margin for the quarter, but an increase in backlog from year-end 2024, alongside stable working capital Revenues and Net Income For the six months ended June 30, 2025, total revenues decreased by 5.8% to $1,842,000, resulting in a net loss of ($57,000) or ($0.01) per diluted share, compared to net income of $158,000 or $0.03 per diluted share in the prior year period | Metric | 6M 2025 | 6M 2024 | % Change | | :--------------------------------- | :------ | :------ | :------- | | Revenues | $1,842 | $1,956 | -5.8% | | Net (loss) income | $(57) | $158 | -136.1% | | Net (loss) income per diluted share | $(0.01) | $0.03 | -137.4% | - The fiscal year-to-date decrease in net income was primarily due to lower Net investment income, partially offset by higher Net sales driven by higher product shipments[15] Gross Margin Gross margin for Q2 2025 decreased to 57.0% from 59.7% due to lower margin products, while the fiscal year-to-date gross margin remained flat at 54.7% - Q2 2025 gross margin decreased to 57.0% from 59.7% in Q2 2024, primarily due to sales of lower margin products[14] - Fiscal year-to-date gross margin was flat at 54.7% for the six months ended June 30, 2025 and 2024[16] Backlog As of June 30, 2025, the order backlog increased to $527,000 from year-end 2024 but decreased from June 2024, with most expected to ship within 90 days | Date | Backlog Amount | | :---------------- | :------------- | | June 30, 2025 | $527,000 | | December 31, 2024 | $336,000 | | June 30, 2024 | $737,000 | - Order backlog as of June 30, 2025, increased by $191,000 from December 31, 2024, but decreased by $210,000 from June 30, 2024[17] - Most of the backlog is expected to ship within the next 90 days[17] Liquidity and Working Capital Working capital as of June 30, 2025, was $41,634,000, a slight decrease from year-end 2024, with $41.8 million in investments, including $25.2 million in Merchant Investment | (in thousands) | June 30, 2025 | December 31, 2024 | | :------------- | :------------ | :---------------- | | Current assets | $42,515 | $42,642 | | Less: Current liabilities | $881 | $904 | | Working capital | $41,634 | $41,738 | - As of June 30, 2025, LGL Group had $41.8 million in investments, with $25.2 million held within the Merchant Investment business[18] Company Information The LGL Group, a holding company in services, merchant investment, and manufacturing, outlines its business strategy and includes a cautionary note on forward-looking statements About The LGL Group, Inc. The LGL Group, Inc. is a holding company engaged in services, merchant investment, and manufacturing, with its PTF division producing industrial electronic instruments, focusing on growth through diversified industries - The LGL Group, Inc. is a holding company engaged in services, merchant investment, and manufacturing business activities[20] - Precise Time and Frequency, LLC (PTF) is a globally positioned producer of industrial Electronic Instruments[20] - LGL Group's business strategy is primarily focused on growth through expanding new and existing operations across diversified industries[22] - LGL Group common stock and warrants are traded on the NYSE American under the symbols 'LGL' and 'LGL WS', respectively[21] Cautionary Note Concerning Forward-Looking Statements This press release contains forward-looking statements, subject to various uncertainties and risks, made in reliance upon safe harbor provisions, with the company disclaiming any obligation to update them - The press release may contain forward-looking statements, identifiable by words such as 'may,' 'will,' 'expect,' and 'project'[23] - These statements are subject to uncertainties and risks described in SEC filings, and the company disclaims any obligation to update them[23] Detailed Financial Statements This section presents the unaudited condensed consolidated statements of operations and balance sheets, along with detailed segment results for Q2 and the first six months of 2025 Condensed Consolidated Statements of Operations This section presents the unaudited condensed consolidated statements of operations for the three and six months ended June 30, 2025, and 2024, detailing revenues, expenses, and net income/loss attributable to LGL Group common stockholders | (in thousands, except share data) | 2025 | 2024 | | :---------------------------------------- | :--- | :--- | | Net sales | $491 | $531 | | Net investment income | $428 | $538 | | Net gains (losses) | $5 | $(1) | | Total revenues | $924 | $1,068 | | Manufacturing cost of sales | $211 | $214 | | Engineering, selling and administrative | $744 | $617 | | Total expenses | $955 | $831 | | (Loss) income from operations before income taxes | $(31) | $237 | | Income tax expense | $14 | $76 | | Net (loss) income | $(45) | $161 | | Net (loss) income attributable to LGL Group common stockholders | $(51) | $137 | | Diluted (Loss) income per common share | $(0.01) | $0.02 | | (in thousands, except share data) | 2025 | 2024 | | :---------------------------------------- | :--- | :--- | | Net sales | $989 | $923 | | Net investment income | $845 | $1,037 | | Net gains (losses) | $8 | $(4) | | Total revenues | $1,842 | $1,956 | | Manufacturing cost of sales | $448 | $418 | | Engineering, selling and administrative | $1,384 | $1,222 | | Total expenses | $1,832 | $1,640 | | (Loss) income from operations before income taxes | $10 | $316 | | Income tax expense | $42 | $112 | | Net (loss) income | $(32) | $204 | | Net (loss) income attributable to LGL Group common stockholders | $(57) | $158 | | Diluted (Loss) income per common share | $(0.01) | $0.03 | Condensed Consolidated Balance Sheets This section provides the unaudited condensed consolidated balance sheets as of June 30, 2025, and December 31, 2024, detailing the company's assets, liabilities, and stockholders' equity | (in thousands) | June 30, 2025 | December 31, 2024 | | :---------------------------------------- | :------------ | :---------------- | | Cash and cash equivalents | $41,735 | $41,585 | | Marketable securities | $26 | $17 | | Accounts receivable, net | $263 | $493 | | Inventories, net | $254 | $267 | | Prepaid expenses and other current assets | $237 | $280 | | Total current assets | $42,515 | $42,642 | | Total assets | $43,030 | $43,145 | | Total current liabilities | $881 | $904 | | Non-current liabilities | $1,017 | $1,001 | | Total liabilities | $1,898 | $1,905 | | Total stockholders' equity | $41,132 | $41,240 | | Total liabilities and stockholders' equity | $43,030 | $43,145 | Segment Results This section details the unaudited segment results for Electronic Instruments, Merchant Investment, and Corporate segments, outlining their respective revenues, expenses, and operating income/loss for both the three and six months ended June 30, 2025, and 2024 Q2 2025 Segment Performance In Q2 2025, Electronic Instruments revenues decreased by 7.5% and Merchant Investment revenues declined by 16.8%, with Electronic Instruments' operating income slightly down and Merchant Investment's operating income dropping significantly by 37.6%, while the Corporate segment's operating loss widened substantially | Segment | Q2 2025 Revenues | Q2 2024 Revenues | $ Change | % Change | | :------------------- | :--------------- | :--------------- | :------- | :------- | | Electronic Instruments | $491 | $531 | $(40) | -7.5% | | Merchant Investment | $262 | $315 | $(53) | -16.8% | | Corporate | $171 | $222 | $(51) | -23.0% | | Total revenues | $924 | $1,068 | $(144) | -13.5% | | Segment | Q2 2025 Operating Income (Loss) | Q2 2024 Operating Income (Loss) | $ Change | % Change | | :------------------- | :------------------------------ | :------------------------------ | :------- | :------- | | Electronic Instruments | $68 | $74 | $(6) | -8.1% | | Merchant Investment | $148 | $237 | $(89) | -37.6% | | Corporate | $(247) | $(74) | $(173) | 233.8% | Six Months Ended June 30, 2025 Segment Performance For the first six months of 2025, Electronic Instruments revenues increased by 7.2% and operating income improved by 14.5%, while Merchant Investment revenues decreased by 15.7% and operating income fell by 36.9%, with the Corporate segment's operating loss widening by 59.5% | Segment | 6M 2025 Revenues | 6M 2024 Revenues | $ Change | % Change | | :------------------- | :--------------- | :--------------- | :------- | :------- | | Electronic Instruments | $989 | $923 | $66 | 7.2% | | Merchant Investment | $509 | $604 | $(95) | -15.7% | | Corporate | $344 | $429 | $(85) | -19.8% | | Total revenues | $1,842 | $1,956 | $(114) | -5.8% | | Segment | 6M 2025 Operating Income (Loss) | 6M 2024 Operating Income (Loss) | $ Change | % Change | | :------------------- | :------------------------------ | :------------------------------ | :------- | :------- | | Electronic Instruments | $87 | $76 | $11 | 14.5% | | Merchant Investment | $301 | $477 | $(176) | -36.9% | | Corporate | $(378) | $(237) | $(141) | 59.5% |