The LGL Group (LGL) Q4 2021 earnings summary

Executive summary

• FY2021 revenue declined 9.7% YoY to $28.14M as weaker avionics shipments outweighed strong space demand; backlog rose 50.5% to $29.80M.

• Net income rose to $14.64M from $0.97M, driven primarily by the IronNet-related Sponsor investment gain and partly offset by losses on IRNT securities.

Financial highlights

• Revenue was $28.14M, down 9.7% YoY; gross margin increased to 35.8% from 35.1%, with inflationary pressures tempering improvement.

• Operating loss was $0.79M; excluding the $1.32M non-cash IRNT share donation, operating income was $0.53M versus $1.42M in 2020.

• Net income was $14.64M; basic and diluted EPS were $2.77 and $2.74, respectively, versus $0.19 for both measures in 2020.

• Operating cash flow was $1.35M versus $3.19M; cash and cash equivalents rose to $29.02M, aided by $18.55M in IRNT-related proceeds.

Outlook and guidance

• Backlog reached $29.80M at year-end, up 50.5% YoY; a substantial portion was expected to ship in 2022, with no assurance on timing or fulfillment.

• A $6.3M Q4 defense order tied to a major missile-defense program was expected to ship mostly after 2022.

• Available cash, marketable securities and operating cash flow were expected to cover working capital and capital expenditure needs for the next 12 months from filing.