Lgl Group, Inc. (the) · AMEX:LGL
Lgl Group, Inc. (the) — The LGL Group — 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 document includes certain “forward-looking statements” within the meaning of the 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 ma
Slide 3: Agenda
Agenda Introduction and Overview Timing Market Basics Software Defined Radio Financial Highlights 3 2012 Investor Presentation 8/9/2012
Slide 4: Introductions and Overview
Introductions and Overview 4 2012 Investor Presentation 8/9/2012
Slide 5: About MtronPTI: the primary brand
About MtronPTI: the primary brand ~50 years experience providing precision filter and timing solutions Blue chip clients long product cycles, preferred vendor relationships Diverse markets communications, mil/aero, instrumentation World-class team unparalleled experience Worldwide manufacturing high
Slide 6: Choose to grow with MtronPTI
Choose to grow with MtronPTI "It's very important to understand the need for responsiveness. Don't know why our other suppliers don't 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!” $35B wireless infrastructu
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 Balanced • High growth, ICT infrastructure driven by video, smart phones and tablet internet access Demand • Long p
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 ICT Military Wide product range / performance / price High frequency filters essential to wireless comm ~50 years
Slide 9: …with critical components for real-time tasks
…with critical components for real-time tasks Internet data switch ICT Optical switch and router Sync-E packet timing Point-to-point microwave backhaul Wireless base station radio Internet data switch Public safety radio Signal Diplexer Military / Aerospace, Instrumentation Commercial jet airframe c
Slide 10: Deep management expertise
Deep management expertise Years of Industry Experience Professional Background Greg 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 consum
Slide 11: Worldwide support
Worldwide support Over 400 people 10 sales and technical support sites >30 representative firms 155,000 ft2 US and India manufacturing Multiple contract factories ISO9001 AS9100 ISO9001 ISO9001 AS9100 (2013) 11 2012 Investor Presentation 8/9/2012
Slide 12: Timing Market Basics
Timing Market Basics 12 2012 Investor Presentation 8/9/2012
Slide 13: Current precision timing market: $1.3 B
Current precision timing market: $1.3 B 2012 Crystal Oscillators ~ $4 B Others Precision Timing ~ $1.3 B ~$4 billion crystal oscillator market South Korea Others 6% CAGR through 2017 EU & N.A. Taiwan 1Source: Databeans 2012 Timing Devices Report Japan EU & N.A. Japan Taiwan China Source: company est
Slide 14: 4G/LTE driving ICT market spending
4G/LTE driving ICT market spending US Smart Phone Share Passes Feature Phones 80% 70% Feature phones 60% End users driving the shift 50% 40% Smart phones Most new phones are now smart phones 30% Tablet tsunami – shift away from TV / desktop 20% Carrier competition: lower cost, faster data Primary
Slide 15: Strong ICT client relationships
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 relati
Slide 16: Higher performance = IEEE 1588 / SyncE
Higher performance = IEEE 1588 / SyncE $98M TAM2012 , growing at 18% CAGR to $162M2015 Source: company projection; Heavy Reading’s Ethernet Backhaul Quarterly Tracker Service, October 2011 Incoming engineering requests Near term oscillator bookings focused on high stability OCXO 4G / LTE support: Sy
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
Software Defined Radio 18 2012 Investor Presentation 8/9/2012
Slide 19: Current RF filter market: $1.1 B
Current RF filter market: $1.1 B Microwave / RF Filter Market Half cell handset, half high performance applications 2012 ~ $1.1B Cell handset RF components $3.6B2011 Base Sta. Cavity Military uWave 5.6% CAGR to $4.7B2016 LC Filters $1.1B2012 with 10.5% CAGR to $1.7B2016 Cell SAW Ceramic Switched Pre
Slide 20: Strong Mil / Aero client relationships
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 relatio
Slide 21: Software Defined Radio now mainstream
Software Defined Radio now mainstream 2,000,000 Base station transceiver shipments Software controlled versus software defined > 15% CAGR The switch to multi-band radios 1,000,000 All new public safety radios 93% of mobile infrastructure Virtually all military tactical radios Satellite ‘modems’ Pr
Slide 22: SDR driving tunable filter demand
SDR driving tunable filter demand $30M TAM2012 , growing at 10% CAGR to $44M2016 Source: company projection; 2012: tunable projects start Near term filter bookings tunable growing rapidly Cavity Crystal Cavity LC LC Crystal 22 2012 Investor Presentation 8/9/2012
Slide 23: Mil / Aero, Instrumentation markets growth strategy
Mil / Aero, Instrumentation markets growth strategy Grow revenue at strategic clients Continue focused support to insure roadmap alignment Seek second source opportunities; differentiate on performance and reliability Continue to increase tunable revenue Deliver solid performance / reliability to in
Slide 24: Financial Review
Financial Review 24 2012 Investor Presentation 8/9/2012
Slide 25: Strong operating leverage, strong balance sheet
Strong operating leverage, strong balance sheet Revenue and EBITDA ($ in millions, except percentages) 50.0 46.7 20.0% 45.0 41.5 40.2 39.5 40.0 35.7 15.0% 35.0 31.3 31.8 16.2% 30.0 10.0% 6.2% 25.0 4.1% 20.0 5.0% 15.0 0.6% 10.0 -2.0% 0.0% -2.8% -3.7% 5.0 0.0 -5.0% 2006 2007 2008 2009 2010 2011 TTM Q2
Slide 26: Financial highlights
Financial highlights ($000's, except per share amounts and percentages) TTM Q2 2006 2007 2008 2009 2010 2011 2012 Revenue 41,549 39,536 40,179 31,301 46,656 35,682 31,772 Gross margin 12,250 10,173 10,399 7,425 16,350 10,764 8,363 % of revenue 29.5% 25.7% 25.9% 23.7% 35.0% 30.2% 26.3% EBITDA 2,591 (
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
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 Key components in major clients’ systems Added new major clients very “sticky” with high switching costs great promise
Slide 29: GAAP to non-GAAP reconciliations
GAAP to non-GAAP reconciliations Reconciliation of earnings before taxes (GAAP) to EBITDA (non-GAAP) TTM Q2 (000's) 2006 2007 2008 2009 2010 2011 2012 Earnings (loss) before taxes (GAAP) $ 732 $ (2,511) $ (1,155) $ (2,503) $ 6,478 $ 567 $ (1,538) Add: interest expense (income) 698 306 296 405 304 10
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 Diverse markets World–class team Quality certified, low cost worldwide manufacturing Industry leading technology, reliability, convenience, support 30 2012 Inv
Slide 31: Question and Answer
Question and Answer Visit: lglgroup.com mtronpti.com Email: Greg Anderson, President and CEO ganderson@lglgroup.com LaDuane Clifton, CAO lclifton@lglgroup.com Call: (407) 298-2000 31 2012 Investor Presentation 8/9/2012