Lgl Group, Inc. (the) · AMEX:LGL
Lgl Group, Inc. (the) — The LGL Group — Investor Presentation (March 2009)
37 slides from Lgl Group, Inc. (the)'s investor presentation, March 2009
Slide 1: The LGL Group (AMEX: LGL) 2009 Investor Presentation
The LGL Group (AMEX: LGL) 2009 Investor Presentation
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
Slide 3: Agenda
Agenda I. Overview of The LGL Group II. Market and Competition III. Products and Operations IV. Financial Highlights V. Growth Strategies VI. Q & A 3
Slide 4: Overview of The LGL Group
Overview of The LGL Group 4
Slide 5: The LGL Group – AMEX: LGL
The LGL Group – AMEX: LGL • We are a publicly traded global corporation – Businesses have been operating since 1965 – Approximately $40 million of annual revenue – Globally diversified revenue base (56% overseas) – Equity market value of $3.2 million – Recent stock price of $1.61 (52-week high of $8
Slide 6: Key Operating Highlights
Key Operating Highlights • Global manufacturing and sales infrastructure – Headquarters in Orlando, FL – 71,000 square feet of manufacturing facility in Orlando with Department of Defense secret security clearance – 28,000 square feet of manufacturing facility in Yankton, South Dakota for low cost l
Slide 7: Our Value Proposition
Our Value Proposition • Preferred design partner – Customized electronic components – Signal management subsystems • Broad offering of products – Timing and signal management products – Rapid prototype delivery to support engineering design groups • Global supply chain – Flexible, responsive service
Slide 8: Compelling Investment Opportunity
Compelling Investment Opportunity Long history of providing custom engineered, high value products to a blue chip roster of global OEM corporations Established reputation for high quality and innovation • Custom engineering capabilities and advanced technological designs • Platform for growth into
Slide 9: Market and Competition
Market and Competition 9
Slide 10: Key Market Dynamics
Key Market Dynamics • Large, fragmented global market – Total market for frequency/timing components estimated at $4 billion • 26% North America • 21% Europe • 50% Asia Pacific – Majority of market focused on low end, commodity products • 80% supplies to the standardized electronics sector ($3.2 bil
Slide 11: Where We Play
Where We Play 10s - 100s Annual Production Quantities 100s - 10,000s 1,000 - 10,000s 10,000s - 1,000,000s Unit Price $1,000 - $100,000 $100 - $5,000 Filters & Modules High Performance $50 - $150 VCXOs, TCXOs, Clocks MtronPTI Medium Performance $5 - $50 VCXOs, TCXOs, Clocks, Crystals 1,000,000s - 10,
Slide 12: Key Vertical Segments
Key Vertical Segments Available Global Market: $800 Million 12
Slide 13: Our Primary Markets
Our Primary Markets • Telecommunications & Networking Infrastructure – Cell phone base stations – Microwave radios for point-to- point and point-to-multipoint applications – Switches and routers • Military, Avionics and Space – Radar – Communications systems – Electronic warfare – Weaponry 13
Slide 14: Driving Trends in Our Markets
Driving Trends in Our Markets • Telecommunications and Networking – Network centric communications – Mobile system access – Exponential growth of content continues • Military/Avionics – Network enabled troops – GPS tracking/control of assets – Electronic warfare – Unmanned mobile systems • Space – A
Slide 15: Applications Where We Play
Applications Where We Play • Telecom Infrastructure – GPON – WiMax – Wireless and wireline systems • Networking – Wireless area networks – LAN switches – IP phone systems – Enterprise storage systems • Military – JTRS/Manpack/Falcon military radios – Anti-IED jammers – Classified surveillance and el
Slide 16: Applications Where We Play
Applications Where We Play • Military Communications – Military web-enabled communications – Unmanned and long distance surveillance systems • Space – AEHF – MUOS • Avionics – Boeing Dreamliner and Airbus A380 – Regional & Private Jets 16
Slide 17: Products and Operations
Products and Operations 17
Slide 18: Our Core Operation
Our Core Operation • Design, develop, manufacture, and sell custom, high-end electronic components • Provide engineering services to customize these electronic components for specific customer applications • Precision, quartz-based frequency/timing management devices – Used for timing in digital cir
Slide 19: Our Product Family
Our Product Family • MtronPTI’s products are used as clocks in electronic circuits • Electronic circuits need an accurate clock to work properly – Keep electronic signals organized – Control the speed/capacity of the circuit • Quartz clock inside your Wrist Watch – Accurate to 2 seconds per day • Qu
Slide 20: Our Technology Leadership
Our Technology Leadership • Very Low Phase Noise Oscillators – Advanced military radars and surveillance equipment – Advanced homeland security detection systems • Very Low Vibration Sensitivity Oscillators – Mobile radar and surveillance equipment needs to be unaffected by vibration – Critical appl
Slide 21: Engineering Focus
Engineering Focus • Standard devices – Not our focus – High volume, low selling prices – 3rd World production – Automated factories – Avoids business driven by “cost only” customers • Heavy engineering talent – 20% of our people are engineers and scientists – This level of cutting edge experience en
Slide 22: Engineering Focus
Engineering Focus • Custom or “Highly Engineered” devices – Our focus – Unusual frequencies – Specialized signal characteristics – Extreme environment – Results in higher revenue per unit and higher margins • Subsystems – Our emerging focus – Timing with added functions – Signal management with adde
Slide 23: Trusted OEM Relationships
Trusted OEM Relationships • Focused on business growth at the leading OEMs in our primary markets – Global purchasing team controls most aspects of the buying cycle for MtronPTI products – Purchase orders may come through their supplier & contract manufacturing network • Most of our OEM customers ha
Slide 24: Global Manufacturing Network
Global Manufacturing Network • USA – Custom products development – Technology development – New Process development and refinement – “Fast Response” service capability – Location for “secret” classified projects • Asia Pacific – Mature designs – Cost sensitive • Noida, India designs – Investing in c
Slide 25: Financial Highlights
Financial Highlights 25
Slide 26: Financial Summary
Financial Summary ($ in millions except EPS) FYE TTM 12/31/2 9/30/20 007 08 Revenue $39.5 $40.7 Gross Profit 10.2 11.3 % Margin 25.8% 27.8% EBITDA 0.3 0.4 % Margin 0.8% 1.0% Net Income* (0.6) (1.0) % Margin -1.5% -2.5% EPS (0.26) (0.47) *Earnings from continuing operations 26
Slide 27: Positioned for Growth
Positioned for Growth LGL Revenue ($MM) $50.0 - $40.0 - $30.0 - $20.0 - $10.0 - $0.0 FY FY FY FY FY TM 2003 +2004 2005 2006 2007 2008
Slide 28: Solid Capital Position
Solid Capital Position • Total Assets: $ 23M • Net Working Capital: $ 10M • Cash and ST Investments: $ 6M • Long Term Debt: $ 4M • Shareholders’ Equity: $ 11M • Available Line of Credit: $ 3M As of September 30, 2008 28
Slide 29: Key Valuation Statistics
Key Valuation Statistics – Total Shares Outstanding* = 2.2 Million – Stock Price 3/18/09 = $1.61 – Equity Market Value = $3.2 Million – Debt* = $6.2 Million – Cash* = $5.6 Million – Enterprise Value = $3.9 Million * Data as of September 30, 2008 52-Week Stock Price Range = $1.00 - $8.75 29
Slide 30: Growth Strategies
Growth Strategies 30
Slide 31: The LGL Group of Today
The LGL Group of Today • Our Historical Strengths – High quality products at the top end of the market – Great brand equity in the marketplace – Solid blue chip customer base comprised of global industrial companies – Long and successful history in the frequency/timing components marketplace – Globa
Slide 32: Our Vision for Tomorrow
Our Vision for Tomorrow • Top Line Revenue Opportunities – Sell to under-penetrated markets like satellite communications, healthcare, high-end servers and mobile communications – Expand sales coverage into high growth emerging markets of India and China – Leverage existing preferred supplier relati
Slide 33: Our Vision for Tomorrow
Our Vision for Tomorrow • Our Product Philosophy – A leveraged single line business focused on highly engineered products – Reinforce partnership with OEM customers • Reduce customers’ time-to-market • Save customers’ money • Optimize customers’ engineering resources – Significant potential for our
Slide 34: Focused Management Strategy
Focused Management Strategy • Right size the company for the anticipated macro economic decline – Major structural spending cuts have been completed – Clear focus on cash flow and cash preservation • Relentless focus on improving margins – Focused engineering work for higher revenue products – Expan
Slide 35: Focused Management Strategy
Focused Management Strategy • Expand OEM position in China and India – Leverage supplier and partner relationships – Grow with U.S. OEM manufacturers into Asia • Preserve and grow core engineering expertise – Leverage relationships with timing integrated circuit companies – Go to market with new tec
Slide 36: Key Investment Highlights
Key Investment Highlights 36
Slide 37: Q & A
Q&A Visit us: www.lglgroup.com www.mtronpti.com Contact: Bob Zylstra, CEO Email: rzylstra@mtronpti.com Tel: 407-298-2000 37