LGL GROUP INC
For the period ended Dec 31, 2023. Filed Apr 1, 2024.
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FY2023 · Filed Apr 1, 2024
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Discontinued Operations
3. Discontinued Operations
As noted in Note1 - Basis of Presentation, on* October 7, 2022,the Company completed the Separation of MPTI. In accordance with ASC Topic205,* Presentation of Financial Statements ("ASC205"), Subtopic20* - Discontinued Operations*, the Company determined that MtronPTI’s business line met the conditions for a discontinued operation and is recorded as such in the Consolidated Financial Statements. The Company reports financial results for discontinued operations separately from continuing operations in order to distinguish the financial impact of the disposal transaction from ongoing operations.
In connection with the Separation, MtronPTI wrote off $4,439 of intercompany receivables due from LGL Group, which brought intercompany balances to zero.
For the year ended* December 31, 2023*, costs directly related to the Separation were $56. During thefirst quarter of2023, MtronPTI agreed to share excess Separation Costs with LGL Group, thereby reducing the Separation Costs paid by the Company by $28. For the year ended* December 31, 2022*, costs directly related to the Separation were $638. During thefourth quarter of2022, MtronPTI agreed to share excess Separation Costs with LGL Group, thereby reducing the Separation Costs paid by the Company by $219, resulting in net Separation Costs of $419. For the years ended* December 31, 2023and2022*, Separation Costs were included within Income from discontinued operations, net of tax within the Consolidated Statements of Operations.
The following table summarizes the significant line items included in (Loss) income from discontinued operations, net of tax in the Consolidated Statements of Operations for the periods indicated:
| Year Ended December 31, | ||
|---|---|---|
| 2023 | 2022 | |
| Revenues: | ||
| Net sales | $— | $23,529 |
| Total revenues | — | 23,529 |
| Expenses: | ||
| Manufacturing cost of sales | — | 15,164 |
| Engineering, selling and administrative | 28 | 5,870 |
| Total expenses | 28 | 21,034 |
| Operating (loss) income | (28) | 2,495 |
| Interest expense, net | — | (6) |
| Other expense, net | — | (44) |
| (Loss) income from discontinued operations before income taxes | (28) | 2,445 |
| Income tax provision | — | 560 |
| (Loss) income from discontinued operations, net of tax | $(28) | $1,885 |
The cash flows related to discontinued operations havenot been segregated and are included in the Consolidated Statements of Cash Flows for the year ended* December 31, 2022*. The following table summarizes depreciation and other significant operating non-cash items, capital expenditures and financing activities of discontinued operations for the period through* October 6, 2022:*
| Depreciation | $496 |
|---|---|
| Amortization of finite-lived intangible assets | 42 |
| Stock-based compensation expense | 26 |
| Capital expenditures | (662) |
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