Lgl Group, Inc. (the) · AMEX:LGL
Lgl Group, Inc. (the) — Shareholder Meeting (August 2012)
31 slides from Lgl Group, Inc. (the)'s shareholder meeting presentation, Aug 9, 2012
Slide 1: Annual Meeting
Annual Meeting (AMEX: LGL) August 9, 2012
Slide 2: Safe harbor statement
Safe harbor statement This documentincludes certain “forward-looking statements” with ofthe Private Securities litigation Reform Act of 1995. These statements are based on management's current expectations and are subject to uncertainty and changes in circumstances. Actual results may differ materia
Slide 3: Agenda
Agenda Introduction and Overview Timing Market Basics Software Defined Radio Financial Highlights
Slide 4: Introductions and Overview
"Sn Introductions and Overview 99/2082
Slide 5: ~50 years experience
~50 years experience Blue chip clients Diverse markets World-class team Worldwide manufacturing Industry leader when timing matters MéronP TI 4 =m la” About MtronPTI: the primary brand providing precision filter and timing solutions long product cycles, preferred vendor relationships communications,
Slide 6: Choose to grow with MtronPTI
Choose to grow with MtronPTI “Ive very important to understand the need for responsiveness, Don't know why our other suppliers don’ see it as much as you do. ‘Most of [our] market losses are time-to-market errors, You folks make us feel like you have no other priorities!” $358 wireless infrastructur
Slide 7: Investment highlights
Investment highlights LGl’s MtronPTI brand serves high end essential applications in diverse markets including Internet Communications Technology (ICT), Mil / Aero, and Instrumentation igh growth, ICT infrastructure driven by video, smartphones and tabletinternet access + Long production life Mil /
Slide 8: Enabling high performance in diverse markets
Enabling high performance in diverse markets Platform Technology High Performance Markets Quartz timing used in all digital electronics Reliability leader in precision quartz oscillators Wide productrange / performance / price Military High frequency filters essential to wireless comm 50 years of RF
Slide 9: With critical components for real-time tasks
..With critical components for real-time tasks Optical switch and router setensetnine Point-to-point microwave backhaul ae Wireless base station radio —) ia Internet data switch Siemtbipiser Pune stey aio Military / Aerospace, Instrumentation Commercial et airframe control Civilian aircraft position
Slide 10: Years of industry Experience
Years of industry Experience Deep management expertise Professional Backeround Grog Anderson 20+ Mr. Anderson has experience in high-tech manufacturing businesses, which President CEO Includes both low volume/high mix OEM custom products coupled with experience gained in high volume/low cost consume
Slide 11: Worldwide sales and technical support sites
Over ato people 10 sales andtechnicl support stes AFONPTY | -20cep:esenative sins 15,0002 Usandinda manufacturing ‘Multiple contract factories |@ Manufacturing & Sales Location @ Manufacturing Location 2012Investor Presentation Worldwide support s/9/2012
Slide 12: Timing Market Basics
"Sn Timing Market Basics
Slide 13: Current precision timing market: $1.3 B
Current precision timing market: $1.3 B 2012 Crystal Oscillators “$48 comers Precision Timing i “$138 ~$4 billion crystal oscillator market S°“"*o"* 6% CAGR through 2017 euana cine Yume Fragmented / competitive sion sus NA Large Japanese players target consumer devices Precision players typically sm
Slide 14: 4G/LTE driving ICT market spending
4G/LTE driving ICT market spending Us smart Phone Share PazcesFesture Phones a End users driving the shift ii Most new phones are now smart phones = Tablet tsunami —shift away from TV / desktop 2 Carrier competition: lower cost, faster data => Primary internet connection is wireless PPP PLR SE SOLE
Slide 15: Strong ICT client relationships
far Strong ICT client relationships Strong relationships at major infrastructure makers Provide full range of oscillator products to most = broad need visibility Focus on high performance / high reliability = wide client base 60% of shipments to five clients, 80% — 24 clients One-on-one technical re
Slide 16: Higher performance = IEEE 1588 / SyncE
Higher performance = IEEE 1588 / SyncE $98M TAM;12 , growing at 18% CAGR to $162M,o15 Incoming engineering requests Near term oscillator bookings focused on high stability OCXO 4G /LTE support: Sync E, IEEE1588 Timing Module ‘Aerospace 7 strumentaton
Slide 17: Timing market growth strategy
Timing market growth strategy Grow revenue at strategic clients Closer / focused support to align to market evolution More discovery allows wider product opportunity, driving volume up > shift from qualified to preferred vendor Continue to increase high performance revenue Qualify low phase noise os
Slide 18: Software Defined Radio
"Sn Software Defined Radio 2012Invector Presentation
Slide 19: Current RF filter market: $1.1 B
far Current RF filter market: $1.1 B Microwave / RF Filter Market Half cell handset, half high performance applications 2012~ $1.18 Cell handset RF components $3.6B 511 Ba say ae 5.6% CAGR to $4.7B 2916 Filters $1.1B,91 with 10.5% CAGR to $1.7Byo16 Precision filters $330M10,,, 10% CAGR to $480M5,« R
Slide 20: Strong Mil / Aero client relationships
far Strong Mil / Aero client relationships Strong relationships with major OEMs Provide mix of filter / oscillator products to all = broad need visibility Focus on high performance / high reliability= wide client base 60% of shipments to eight clients, 80% — 24 clients Long term support / sales rela
Slide 21: Software Defined Radio now mainstream
Software Defined Radio now mainstream oie Base station transceiver shipments The switch to multi-band radios ee All new public safety radios 93% of mobile infrastructure Virtually all military tactical radios Satellite ‘modems’ = Proven cost effective approach 2007 20082008 2010 20126 20128 20136 20
Slide 22: SDR driving tunable filter demand
SDR driving tunable filter demand $30M TAM, 0:2 , growing at 10% CAGR to $44Mo1¢ 2012: tunable projects start Near term filter bookings tunable growing rapidly + > 2 2012 Invector Presentation
Slide 23: Mil / Aero, Instrumentation markets growth strategy
Mil / Aero, Instrumentation markets growth strategy Grow revenue at strategic clients Continue focused support to insure roadmap alignment Seek second source opportunities; differentiate on performance and reliability Continue to increase tunable revenue Deliver solid performance / reliability to in
Slide 24: Financial Review
Financial Review 99/2082
Slide 25: Strong operating leverage, strong balance sheet
Strong operating leverage, strong balance s| Revenue and EBITDA ‘Sinmilions exept pwcenoess) soo 67 20.0% 450 400 350 309 250 200 150 109 so 00 aso% 10.0% 2006 2007-2008 20092010 20k. THM? 2012 mmrevenue ABMEBTOA re Working Capital and Equi oe “ee sey 250 200 150 109 so oo 2006 200720082008 20102012
Slide 26: Financial highlights
(6000's cept par share armours andparcaraze) Financial highlights 70s 007 08009 wo OP Revenue ass Se I wl ASwE CBORD I ‘Gross margin 120 10173-10398 7416178368 ofrevene 295% 257K 259% 23TH SOK 0K 28.38 errs a a a a So) of even a a eo et Td arnings/{os) before taxes 72 (2511) 1A88) (2503) gave ST (28
Slide 27: Business cycle factors
Business cycle factors Overall weak macroeconomic climate major clients and prospects are on the sidelines delaying microelectronics expense Newer technologies (ex. 4G) taking longer to coalesce further delaying orders Key competitors impacted as well believe we've held share; gained in Ericsson and
Slide 28: Well positioned for growth
a Well positioned for growth Capital position strong Retained all major clients moving forward to execute on both despite decline in their overall orders organic and JV/M&A strategies Keycomponents in major ints’ systems Added new major clients very “sticky” with high switching costs great promise i
Slide 29: GAAP to non-GAAP reconciliations
GAAP to non-GAAP reconciliations econailation of earnings before taxes (GAAP) to EBITDA (non-GAAP) (000's) 2006 20072008 TM a2 2009 2010 2011 2012 Earnings (loss)beforetaxes(Gaa) $782 $ Qsm) $ G55) 306 236 1,105 4,984 $ (2503) $ 647 § Se7 § (4538) 405 308 109 12 938 151 74 720 ‘Addi interest expense
Slide 30: LGL's competitive advantages
LGL’s competitive advantages Strong capital position Experienced management team JV/M&A opportunities ~50 years experience Blue chip clients MéronPTI P WH Diverse markets World-class team Quality certified, low cost worldwide manufacturing Industry leading technology, reliability, convenience, suppo
Slide 31: Question and Answer
Question and Answer Visit: Email: Call: 2012Invector Presentation Jglgroup.com mtronpti.com Greg Anderson, President and CEO ganderson@lglgroup.com LaDuane Clifton, CAO, Idlifton@lglgroup.com (407) 298-2000