The LGL Group (LGL) Q4 2017 earnings summary

Executive summary

• 2017 revenue grew 7.2% to $22.402 million; backlog rose to $11.713 million, and operating income turned positive at $276,000.

• Rights-offering proceeds boosted year-end cash to $13.250 million; the growth strategy prioritizes higher-margin products, internal growth and potential acquisitions.

Financial highlights

• Revenue was $22.402 million, up 7.2% from $20.891 million in 2016; increases included $686,000 from PTF and $682,000 from filter sales.

• Net income was $117,000 vs. $148,000; basic and diluted EPS were $0.04 vs. $0.06.

• Operating income was $276,000 vs. an operating loss of $161,000; gross margin improved to 34.6% from 33.7%.

• Operating cash flow was $681,000 vs. $278,000; year-end cash and cash equivalents were $13.250 million vs. $2.778 million.

Outlook and guidance

• Management expected to fulfill the full $11.713 million year-end backlog during 2018, while noting cancellations, deferrals and timing could affect fulfillment.

• Management expected continued internal growth, particularly at MtronPTI; PTI growth was expected to be more modest as its sales channel expanded.

• Potential acquisitions and broader business development were expected to contribute to growth; no specific opportunities had been identified at filing.

• Existing cash and operating cash generation were expected to cover working capital and capital expenditures for the next 12 months from filing.