Lgl Group, Inc. (the) · AMEX:LGL
Lgl Group, Inc. (the) — The LGL Group — Shareholder Meeting (December 2013)
21 slides from Lgl Group, Inc. (the)'s shareholder meeting presentation, Dec 12, 2013
Slide 1: The LGL Group, Inc. 2013 Annual Meeting of Stockholders
The LGL Group, Inc. (NYSE MKT: LGL) 2013 Annual Meeting of Stockholders December 12, 2013
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: Corporate Snapshot
Corporate Snapshot Publicly traded global corporation Formed in 1917 IPO in 1946 MtronPTI subsidiary 1965 $28 million TTM annual revenue September 30, 2013 Global revenue 49% outside U.S. $5.05 Stock price 12/10/2013 $6.52 52-week high $14.4 million market capitalization $9.4 million cash and cash e
Slide 4: MtronPTI: The Primary Brand
MtronPTI: The Primary Brand Design, manufacture and market customized high-precision components used for frequency control in electronic systems: ~50 years experience precision filter and timing solutions, industry experts Blue-chip clients long product cycles, preferred supplier relationships Diver
Slide 5: 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 product range / performance / price Aerospace ICT Approx. 2/3 of revenue High frequency filters essential to
Slide 6: Critical Components for Clients' Systems
Critical Components for Clients’ Systems Products Applications Aerospace/Defense (65% of revenue) Digital control (avionics) Software-defined radio IED-jamming RF system Radios Next-generation UAVs Radar Orbital space communications ICT (35% of revenue) Optical switches and routers Point-to-point ra
Slide 7: Strong Client Relationships
Strong Client Relationships We have a long history of providing custom-engineered, high-value products to a roster of blue-chip global B2B OEM clients… Design wins drive recurring revenue; product life cycles > 5 years Focus on high performance/high reliability applications Clients commit to estimat
Slide 8: Frequency Control Value Chain
Frequency Control Value Chain Final product Final system design and assembly Integrated module design and assembly Component design and assembly Crystal finishing Guiding principles for new products: Raw quartz, prelim. • Long and sticky product life cycle processing and • Higher revenue per unit, h
Slide 9: Precision Timing Market
Precision Timing Market Crystal Oscillators ~ $4 B ~$4 billion crystal oscillator market Precision Timing 6% CAGR through 2017 ~ $1.4 B 1Source: Databeans 2012 Timing Devices Report Others Taiwan Japan 67% EU & Consumer 33% Non- N.A. (primarily produced in Consumer Asia) China Source: company estima
Slide 10: RF/Microwave Filter Market
RF/Microwave Filter Market RF/Microwave market: ~40% high performance applications - Precision filters $400M2012; 10% CAGR to $580M2016 1Source: Databeans 2012 Timing Devices Report Base Sta. Cavity Military uWave LC Cell SAW RF/Microwave Filter Market 2012 ~ $1.1B Ceramic Addressable = $0.6B Switch
Slide 11: Small Company, Global Presence
Small Company, Global Presence Over 250 people 10 sales and technical support sites >30 representative firms 155,000 ft2 US and India manufacturing Multiple contract factories ISO9001 AS9100C ISO9001 ISO9001 AS9100C 11 2013 Annual Meeting of Stockholders 12/12/2013
Slide 12: Our Strategy
Our Strategy Extend technology and IP position • R&D investments in tunable filter platform • Investments in high-performance timing for aerospace, new materials for harsh environments • Shifting into products that are higher in the value chain (modules, subsystems), leading to higher ASP and GM Gro
Slide 13: Repositioning for Growth
Repositioning for Growth Restructuring to right-size the business to break-even at current revenue levels Focus on our core strengths in timing and filters Invest where we can win We have core technology that is essential to our customers’ designs Long and sticky product life cycles, not going away
Slide 14: Management Team
Management Team Michael Ferrantino, Sr., Executive Vice Chairman-LGL, Executive Chairman-MtronPTI 40+ years in RF/microwave manufacturing; CEO Valpey-Fisher, Chairman and CEO Micro Networks Corp. Greg Anderson, President and CEO 24+ years in high-tech manufacturing; Business Development Mgr. and Ope
Slide 15: Financial Review
Financial Review 15 2013 Annual Meeting of Stockholders 12/12/2013
Slide 16: Strong Operating Leverage
Strong Operating Leverage Revenue, Gross Margin and EBITDA ($ in millions, except percentages) Capital Position as of: 9/30/2013 12/31/2012 • Cash and cash equivalents of $3.63 per share at Total Assets $ 22.6M $ 29.6M 09/30/2013 Net Working Capital 13.9M 16.6M Cash-Adjusted Working Capital 6.6M 7.2
Slide 17: Order Backlog Trend
Order Backlog Trend Order Backlog 17 2013 Annual Meeting of Stockholders 12/12/2013
Slide 18: Income Statement Highlights
Income Statement Highlights TTM 2013 ($ in millions, except EPS) FY 2007 FY 2008 FY 2009 FY 2010 FY 2011 FY 2012 A: Q3 2013 Revenue $ 39.5 $ 40.2 $ 31.3 $ 46.7 $ 35.7 $ 29.7 $ 28.1 % Change 1.6% -28.4% 32.9% -30.8% -20.1% -5.4% Gross Profit 10.2 10.4 7.4 16.4 10.8 7.7 7.9 % Margin 25.7% 25.8% 23.7%
Slide 19: Balance Sheet Highlights
Balance Sheet Highlights ($ and shares in millions) FY 2007 FY 2008 FY 2009 FY 2010 FY 2011 FY 2012 Q3 2013 Cash and Cash Equivalents $ 5.2 $ 5.3 $ 3.8 $ 4.1 $ 13.7 $ 10.1 $ 9.4 % Change 1.7% -39.5% 8.0% 69.7% -35.4% -7.0% Cash-Adj. WC (AR + Inv - AP) 9.0 9.5 7.8 9.7 8.2 7.2 6.6 % Change 5.1% -22.0%
Slide 20: Investment Considerations
Investment Considerations Strong capital position Flexible platform with operating leverage JV/M&A opportunities Over 50 years’ experience Blue-chip B2B OEM clients Core technology is essential for customers’ applications Differentiated supply for Aerospace/Defense Positioning for Growth 20 2013 Ann
Slide 21: GAAP to Non-GAAP Reconciliations
GAAP to Non-GAAP Reconciliations Reconciliation of earnings before taxes (GAAP) to EBITDA (non-GAAP) Computation of Adjusted Working Capital: ($ in millions, except per share amounts) ($ in millions) As of As of 2007 2008 2009 2010 2011 2012 TTM 2013 12/31/2012 9/30/2013 Net Income (GAAP) $ (2.6) $