Lgl Group, Inc. (the) · AMEX:LGL
Lgl Group, Inc. (the) — The LGL Group — G8: ThinkEquity's 8th Annual Growth Conference (September 2011)
26 slides from Lgl Group, Inc. (the)'s conference presentation, Sep 14, 2011
Slide 1: The LGL Group, Inc.
The LGL Group, Inc. Laying the foundation for profitable growth G8: ThinkEquity’s 8th Annual Growth Conference September 14, 2011
Slide 2: Safe Harbor Statement
Investor Presentation 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 circumstan
Slide 3: Overview of The LGL Group
Overview of The LGL Group We are a publicly traded global corporation… Formed in 1917, IPO in 1946, current subsidiaries have been operating since 1965 Approximately $42 million of annual revenue and $5 million of EBITDA (TTM as of 6/30/11) Globally diversified revenue base (approx. 50% overse
Slide 4: Attractive Investment Opportunity
Overview of The LGL Group Attractive Investment Opportunity We believe our stock is undervalued compared to our peer group of companies • Currently we trade at 0.3x LTM revenue and 2.7x LTM EBITDA • This compares quite unfavorably to the mean comps multiples of 0.8x LTM revenue and 8.7x LTM EBITDA •
Slide 5: Peer Comparisons
Overview of The LGL Group Peer Comparisons Frequency Control Market Stock Price Latest Twelve Months Stock Current 52-Wk 52-Wk Equity Total Total Enterprise EV / EV / EBITDA PE Price / (All figures in millions of US$) Ticker 9/9/2011 High Low Value Debt Cash Value Revenue EBITDA Margin Ratio Tang BV
Slide 6: Key Competitive Differentiation
Overview of The LGL Group Key Competitive Differentiation Long history as preferred supplier to blue-chip global OEM customers Superb engineering capabilities Differentiated by customization, quality, and reliability Worldwide sales and manufacturing presence Significant accomplishments ov
Slide 7: Mission Statement
Overview of The LGL Group Mission Statement Our mission is to: Be a leader in the design of custom frequency control and filter products within the Military-Instrumentation-Space-Avionics (MISA) and Telecommunications market segments; Build value for our customers through broad product offerings
Slide 8: Key Investment Considerations
Key Investment Considerations Design wins drive recurring revenue Long product life cycles, long-term customers 2010 returned to growth and strong profitability Approximately 50% YoY revenue growth and 16% EBITDA margin Increased market share driven by major new product introductions New
Slide 9: Critical Components for Customers' Systems
Critical Components for Customers’ Systems Products Applications Communications Infrastructure Optical switches and routers Point-to-point radio systems Wireless base stations GPS navigation MISA Applications IED-jamming RF system Man-pack radios Next-generation unmanned aerial veh
Slide 10: Timing Control Market: Key Attributes
Timing Control Market: Key Attributes Bandwidth Global market for timing control estimated at $4 billion 26% North America, 21% Europe, 50% Asia-Pacific Global market dominated by large Japanese suppliers and consumer device applications Total available market for precision timing componen
Slide 11: Precision Timing Device Market: Segmentation
Precision Timing Device Market: Segmentation Industrial & Instrumentation: 7% Medical: 5% Military & Aerospace: 31% Distribution & Other: Telcom: 47% 10% Available Global Market: $1.2 Billion * Chart based on Company’s internal estimates - 11 -
Slide 12: Precision Filter Markets: Key Attributes
Precision Filter Markets: Key Attributes Bandwidth Precision filter market estimated at $900 million, high growth potential Area of focus for new product development and strategic initiatives Filter products benefit from a more favorable competitive landscape as compared to timing products
Slide 13: Long-Term Blue-Chip Customer Base
Long-Term Blue-Chip Customer Base The Company has a long history of providing custom-engineered, high- value products to a roster of blue-chip global OEM customers Design wins drive recurring revenue Product development investments drive new design-win opportunities Product life cycles exten
Slide 14: Product Strategy
Product Strategy Subsystems Dollar Content Integrated Products Pursuing marketing partnerships and Components joint ventures Level of Integration Guiding principles for new products Technically-advanced Higher revenue per unit Higher gross margins - 14 -
Slide 15: Global Operating and Sales Presence
Global Operating and Sales Presence Global Operations Headquarters in Orlando, FL 71,000 square feet of manufacturing facility and engineering center in Orlando, Florida 28,000 square feet of manufacturing facility and engineering center in Yankton, South Dakota 13,000 square feet of manuf
Slide 16: Management Team
Management Team Years of Industry Experience Professional Background Greg Anderson 20+ Mr. Anderson has experience in high-tech manufacturing businesses, President, CEO which includes both low volume/high mix OEM custom products coupled with experience gained in high volume/low cost consumer product
Slide 17: Financial Overview
Financial Overview
Slide 18: H1 2011 Highlights
Financial Overview H1 2011 Highlights Sales/Revenues Positive book to bill ratio for H1 and Q2 2011 Telecom market segment showing strong activity for new orders Demand from MISA market segment softer, although Avionics segment has shown improvement Order backlog at end of Q2 2011 of $12.1M,
Slide 19: H1 2011 Highlights
Financial Overview H1 2011 Highlights Margins/Costs/Income/EPS Gross margin was 31.8% for Q2 2011, compared to Q2 2010 gross margin of 36.3%, driven primarily by a reduction in revenue, which eroded gross margin by spreading fixed infrastructure costs over a smaller revenue base Q2 2011 Pre-tax
Slide 20: Revenue Trend
Financial Overview Revenue Trend Historical Revenue ($M) $50.0 $46.7 $45.0 $41.5 $42.1 $39.5 $40.2 $40.0 $35.1 $35.0 $31.3 $30.0 $25.0 $20.0 $15.0 $10.0 $5.0 $0.0 FY 2005 FY 2006 FY 2007 FY 2008 FY 2009 FY 2010 TTM (as of Q2 2011) Note: Revenues for 2005 through a portion of 2007 are adjusted to exc
Slide 21: Quarterly Income Statement Trends
Financial Overview Quarterly Income Statement Trends $14.0 50.0% $12.5 Historical Revenue and Margins ($MM) $12.4 $12.0 $11.0 40.0% $10.7 $10.2 $10.0 37.6% $9.7 $10.0 $9.2 36.3% 34.1% $9.0 30.0% 31.6% 31.7% 31.8% 32.6% $8.0 $7.5 $7.3 20.6% 25.6% $7.2 25.2% 18.9% 20.0% 21.9% 13.0% $6.0 19.8% 19.5% 11
Slide 22: Income Statement Highlights
Financial Overview Income Statement Highlights TTM 2011 ($ in millions, except EPS) FY 2007 FY 2008 FY 2009 FY 2010 A: Q2 2011 Revenue $ 39.5 $ 40.2 $ 31.3 $ 46.7 $ 42.1 % Growth 1.6% -28.4% 32.9% -10.9% Gross Profit 10.0 10.4 7.4 16.4 14.2 % Margin 25.3% 25.8% 23.7% 35.0% 33.6% EBITDA (1.1) 0.2 (1.
Slide 23: Capital Position as of June 30, 2011
Capital Structure Capital Position as of June 30, 2011 Total assets: $ 31.4 million Net working capital: $ 19.3 million Cash and cash equivalents: $ 11.0 million Total debt (including current portion): $ 0.5 million Shareholders’ equity: $ 25.9 million Available lines of credit: $ 6.0 million • Work
Slide 24: GAAP to Non-GAAP Reconciliations
Financial Summary GAAP to Non-GAAP Reconciliations Reconciliation of GAAP net income to non-GAAP pre-tax earnings Computation of Adjusted Working Capital: As of As of ($ in millions, except per share amounts) 2007 2008 2009 2010 TTM 2011 ($ in millions) 12/31/2010 6/30/2011 Net Income (GAAP) $ (2.6)
Slide 25: Laying the foundation for profitable growth
Laying the foundation for profitable growth Invest organically into core business Engineering investments to leverage opportunities with existing customers and maximize our positions Incremental capacity investments Additional investments into products that are higher in the value chain, suc
Slide 26: Question and Answer
Question and Answer Visit us: www.lglgroup.com www.mtronpti.com Contact us: Greg Anderson, President and CEO (E-mail: ganderson@lglgroup.com) LaDuane Clifton, Chief Accounting Officer (E-mail: lclifton@lglgroup.com) Voice: (407) 298-2000 - 26 -
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