The LGL Group (LGL) Q4 2016 earnings summary

Executive summary

• FY2016 revenue rose 0.9% to $20.891M; operating loss narrowed to $161K from $788K; net income was $148K vs. a $711K loss.

• PTF expanded the product portfolio into time and frequency instruments; year-end backlog reached $10.549M, up 19.9% YoY.

Financial highlights

• Gross margin improved to 33.7% from 33.1%; engineering, selling and administrative expenses fell to 34.4% of revenue from 36.9%.

• Net income included a $165K income tax benefit; other income of $166K included $118K of insurance proceeds, $62K of investment dividends and a $4K bargain purchase gain, offset by other expenses.

• Basic and diluted EPS were $0.06, compared with a $0.27 loss per share in 2015.

Outlook and guidance

• Expected to fulfill the full $10.549M year-end backlog during 2017, subject to cancellations, deferrals and scope changes; fulfillment timing is not assured.

• Strong backlog and balance sheet support expected organic growth and potential synergistic alliances or acquisitions.

• Electronic components were expected to remain substantially all revenue in 2017, leaving results dependent on that product line.