M-tron Industries Inc
For the period ended Jun 30, 2024. Filed Aug 14, 2024.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Jun 30, 2024 · Filed Aug 14, 2024
MPTI$60.34+5.3%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-03-31; filed 2024-05-14.
0001437749-24-016652
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2024-06-30; filed 2024-08-14.
0001437749-24-026572
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 51 previous paragraphs and 72 current paragraphs.
39 unchanged; 11 reworded; 18 added; 1 removed; 0 previous and 4 current paragraphs rearranged.
Tables are not compared: 9 previous and 17 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (18)
Current report
Total revenues increased $1,668, or 16.4%, from $10,140 for the three months ended June 30, 2023 to $11,808 for the three months ended June 30, 2024 primarily due to continued strong defense program product and solution shipments.
Current report
Six months ended June 30, 2024*** compared to six months ended June 30, 2023***
Current report
Total Revenues
Current report
Total revenues increased $3,486, or 17.9%, from $19,507 for the six months ended June 30, 2023 to $22,993 for the six months ended June 30, 2024 primarily due to continued strong defense program product and solution shipments.
Current report
Total Costs and Expenses
Current report
Total costs and expenses increased $1,916, or 11.2%, from $17,181 for the six months ended June 30, 2023 to $19,097 for the six months ended June 30, 2024. The increase is primarily due to a $1,295, or 25.4%, increase in Engineering, selling and administrative from $5,089 for the six months ended June 30, 2023 to $6,384 for the six months ended June 30, 2024 from higher research and development investment, higher sales commissions related to an increase in revenues, and an increase in administrative and corporate expenses consistent with the overall growth in the business.
Current report
Gross Margin
Current report
Total Other Income (Expense), Net
Current report
Income Tax Expense
Current report
Non-GAAP Financial Measures
Current report
To supplement our Condensed Consolidated Financial Statements presented on a GAAP basis, the Company presents its financial condition and results of operations in the way it believes will be most meaningful and representative of its business results. Some of the measurements the Company uses are "Non-GAAP financial measures" under SEC rules and regulations. The non-GAAP financial measures the Company presents are listed below and may not be comparable to similarly-named measures reported by other companies. The presentation of this additional information is not meant to be considered in isolation or as a substitute for net earnings or diluted earnings per share prepared in accordance with GAAP.
Current report
The Company uses the following operating performance measure because the Company believes it provides both management and investors with a more complete understanding of the underlying operational results and trends and our marketplace performance:
Current report
Adjusted Earnings Before Interest, Taxes, Depreciation, and Amortization ("EBITDA") is derived by excluding the items set forth below from Income before income taxes. Excluded items include the following:
Current report
Reconciliation of GAAP Income Before Income Taxes to Non-GAAP Adjusted EBITDA
Current report
The following table presents a reconciliation of income before income taxes to Adjusted EBITDA, a non-GAAP measure:
Current report
Adjusted EBITDA increased $592 from $1,931 for the three months ended June 30, 2023 to $2,523 for the three months ended June 30, 2024 primarily due to increased gross margins; continued containment of operating expenses other than strategic investments in research and development, resulting in higher income before taxes; higher depreciation; and higher stock-based compensation partially offset by higher interest income.
Current report
Six months ended June 30, 2024*** compared to six months ended June 30, 2023***
Current report
Adjusted EBITDA increased $1,826 from $2,959 for the six months ended June 30, 2023 to $4,785 for the six months ended June 30, 2024 primarily due to increased gross margins; continued containment of operating expenses other than strategic investments in research and development, resulting in higher income before taxes; higher depreciation; and higher stock-based compensation partially offset by higher interest income.
Removed paragraphs (1)
Previous report
Total revenues increased $1,818, or 19.4%, from $9,367 for the three months ended March 31, 2023 to $11,185 for the three months ended March 31, 2024 primarily due to strong defense product shipments.
Reworded paragraphs (11)
Previous wording
Inflation in the United States decreased from 6.5% as of December 31, 2022 to 3.4% as of December 31, 2023, which is still above the U.S. Federal Reserve's long-term target of 2.0%. Although inflation is expected to continue to decrease in 2024, the continued higher inflationary conditions may have an adverse impact on our Manufacturing cost of sales along with Engineering, selling and administrative expenses, as these costs could increase at a rate higher than our revenue. The U.S. Federal Reserve raised the federal funds rate a total of four times throughout 2023, resulting in a range from 5.25% to 5.50% as of December 31, 2023. Through the date of this Quarterly Report on Form 10-Q, the Federal Reserve has maintained the federal funds rate in the same range as of December 31, 2023. It is expected that the U.S. Federal Reserve will continue to hold the federal funds rate steady or start to decrease it during 2024 to, among other things, control inflation; however, the timing of any such decrease remains unclear. As a result, we have increased the prices we charge our customers.
Current wording
Inflation in the United States decreased from 6.4% as of December 31, 2022 to 3.4% as of December 31, 2023, which is still above the U.S. Federal Reserve's long-term target of 2.0%. Through the date of this Quarterly Report on Form 10-Q, inflation has further decreased to 3.0%. Although inflation is expected to continue to decrease in 2024, the continued higher inflationary conditions may have an adverse impact on our Manufacturing cost of sales along with Engineering, selling and administrative expenses, as these costs could increase at a rate higher than our revenue. The U.S. Federal Reserve raised the federal funds rate a total of four times throughout 2023, resulting in a range from 5.25% to 5.50% as of December 31, 2023. Through the date of this Quarterly Report on Form 10-Q, the Federal Reserve has maintained the federal funds rate in the same range as of December 31, 2023. It is expected that the U.S. Federal Reserve will continue to hold the federal funds rate steady or start to decrease it during 2024 to, among other things, control inflation; however, the timing of any such decrease remains unclear. As a result, we have increased the prices we charge our customers.
Previous wording
Total expenses increased $790, or 9.2%, from $8,606 for the three months ended March 31, 2023 to $9,396 for the three months ended March 31, 2024. The increase is primarily due to a $555, or 22.8%, increase in Engineering, selling and administrative from $2,435 for the three months ended March 31, 2023 to $2,990 for the three months ended March 31, 2024 from higher research and development costs, higher sales commissions related to an increase in revenues, and an increase in corporate expenses consistent with the overall growth in the business.
Current wording
Total costs and expenses increased $1,126, or 13.1%, from $8,575 for the three months ended June 30, 2023 to $9,701 for the three months ended June 30, 2024. The increase is primarily due to a $740, or 27.9%, increase in Engineering, selling and administrative from $2,654 for the three months ended June 30, 2023 to $3,394 for the three months ended June 30, 2024 from higher research and development investment, higher sales commissions related to an increase in revenues, and an increase in administrative and corporate expenses consistent with the overall growth in the business.
Previous wording
Gross margin (Revenues less Manufacturing cost of sales as a percentage of Revenues), increased 861 basis points from 34.1% for the three months ended March 31, 2023 to 42.7% for the three months ended March 31, 2024 reflecting higher revenues and change in product mix to higher margin products.
Current wording
Gross margin (Revenues less Manufacturing cost of sales as a percentage of Revenues) increased 498 basis points from 41.6% for the three months ended June 30, 2023 to 46.6% for the three months ended June 30, 2024 reflecting higher revenues, improved production efficiencies due to previous investments, and an improved product mix to higher margin products.
Previous wording
The increase was partially offset by:
Current wording
Total Other income (expense), net increased $22, or 129.4%, from $17 for the three months ended June 30, 2023 to $39 for the three months ended June 30, 2024. The increase was primarily due to a $49, or 980.0%, increase in Interest income (expense), net from ($5) for the three months ended June 30, 2023 to $44 for the three months ended June 30, 2024 from higher interest income earned on investments in money market mutual funds. The increase was partially offset by a $27, or 122.7%, decrease in Other income (expense), net from $22 for the three months ended June 30, 2023 to ($5) for the three months ended June 30, 2024 primarily due to unfavorable currency movements.
Previous wording
Income tax expense increased $211, or 127.1%, from $166 for the three months ended March 31, 2023 to $377 for the three months ended March 31, 2024 primarily due to the increase in Income before income taxes driven by the increase in revenues discussed above.
Current wording
Income tax expense increased $97, or 31.8%, from $305 for the three months ended June 30, 2023 to $402 for the three months ended June 30, 2024 primarily due to the increase in Income before income taxes driven by the increase in revenues discussed above.
Previous wording
Total Other income (expense), net increased $116, or 276.2%, from ($42) for the three months ended March 31, 2023 to $74 for the three months ended March 31, 2024. The following items contributed to the overall increase:
Current wording
Total Other income (expense), net increased $138, or 552.0%, from ($25) for the six months ended June 30, 2023 to $113 for the six months ended June 30, 2024. The following items contributed to the overall increase:
Previous wording
As of March 31, 2024, our order backlog was $46,130, a decrease of $1,701, or 3.6%, from $47,831 as of December 31, 2023 and an increase of $592, or 1.3%, from $45,538 as of March 31, 2023. The decrease in backlog from December 31, 2023 reflects an increase in revenue and timing of certain orders.
Current wording
As of June 30, 2024, our order backlog was $45,322, a decrease of $2,509, or 5.2%, from $47,831 as of December 31, 2023 and a decrease of $6,269, or 12.2%, from $51,591 as of June 30, 2023. The decrease in backlog from December 31, 2023 reflects increased revenues along with the variability of our order intake due to the size and timing of large program-related orders.
Previous wording
As of March 31, 2024 and December 31, 2023, Cash and cash equivalents were $5,414 and $3,913, respectively.
Current wording
As of June 30, 2024 and December 31, 2023, Cash and cash equivalents were $6,501 and $3,913, respectively.
Previous wording
Cash provided by operating activities was $1,496 for the three months ended March 31, 2024 compared to cash provided by operating activities of $279 for the three months ended March 31, 2023, an increase of $1,217, primarily due to the following:
Current wording
Cash provided by operating activities was $3,456 for the six months ended June 30, 2024 compared to cash provided by operating activities of $779 for the six months ended June 30, 2023, an increase of $2,677, primarily due to the following:
Previous wording
Cash used in investing activities was $122 for the three months ended March 31, 2024 compared to cash used in investing activities of $78 for the three months ended March 31, 2023, an increase of $44, primarily due to the purchase of equipment during the three months ended March 31, 2024.
Current wording
Cash used in investing activities was $995 for the six months ended June 30, 2024 compared to cash used in investing activities of $302 for the six months ended June 30, 2023, an increase of $693, primarily due to the purchase of equipment to support growth, next generation product development, and operational efficiencies during the six months ended June 30, 2024.
Previous wording
Cash provided by financing activities was $127 for the three months ended March 31, 2024 compared to cash provided by financing activities of $0 for the three months ended March 31, 2023, an increase of $127, primarily due to the exercise of stock options by an executive officer.
Current wording
Cash provided by financing activities was $127 for the six months ended June 30, 2024 compared to cash used in financing activities of $82 for the six months ended June 30, 2023, an increase of $209, primarily due to the exercise of stock options by an executive officer.
Rearranged current paragraphs (4)
Current report — wording carried from elsewhere
The following table presents our Condensed Consolidated Statements of Operations for the periods indicated:
Current report — wording carried from elsewhere
Gross margin (Revenues less Manufacturing cost of sales as a percentage of Revenues) increased 670 basis points from 38.0% for the six months ended June 30, 2023 to 44.7% for the six months ended June 30, 2024 reflecting higher revenues, improved production efficiencies due to previous investments, and an improved product mix to higher margin products.
Current report — wording carried from elsewhere
Income tax expense increased $308, or 65.4%, from $471 for the six months ended June 30, 2023 to $779 for the six months ended June 30, 2024 primarily due to the increase in Income before income taxes driven by the increase in revenues discussed above.
Current report — wording carried from elsewhere
Three months ended June 30, 2024*** compared to three months ended June 30, 2023***