M-tron Industries Inc
For the period ended Sep 30, 2024. Filed Nov 13, 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.
Sep 30, 2024 · Filed Nov 13, 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 2024-06-30; filed 2024-08-14.
0001437749-24-026572
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2024-09-30; filed 2024-11-13.
0001437749-24-034901
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 72 previous paragraphs and 70 current paragraphs.
49 unchanged; 16 reworded; 5 added; 7 removed; 0 previous and 0 current paragraphs rearranged.
Tables are not compared: 17 previous and 22 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 (5)
Current report
Total costs and expenses increased $1,438, or 16.2%, from $8,855 for the three months ended September 30, 2023 to $10,293 for the three months ended September 30, 2024. The following items contributed to the overall increase:
Current report
Nine Months ended September 30, 2024*** compared to nine months ended September 30, 2023***
Current report
Total costs and expenses increased $3,354, or 12.9%, from $26,036 for the nine months ended September 30, 2023 to $29,390 for the nine months ended September 30, 2024. The following items contributed to the overall increase:
Current report
Total Other income (expense), net increased $212, or 1,766.7%, from ($12) for the nine months ended September 30, 2023 to $200 for the nine months ended September 30, 2024. The following items contributed to the overall increase:
Current report
Nine months ended September 30, 2024 compared to nine months ended September 30, 2023
Removed paragraphs (7)
Previous report
Inflation and Changing Interest Rates
Previous report
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 report
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 report
Six months ended June 30, 2024*** compared to six months ended June 30, 2023***
Previous 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.
Previous report
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 report
Six months ended June 30, 2024*** compared to six months ended June 30, 2023***
Reworded paragraphs (16)
Previous wording
We are not aware of any material trends or uncertainties, other than national economic conditions affecting our industry generally, that may reasonably be expected to have a material impact, favorable or unfavorable, on our revenues or income other than the one listed below and the risk factors disclosed in our Annual Report on Form 10-K, as filed with the SEC on March 25, 2024.
Current wording
We are not aware of any material trends or uncertainties, other than national economic conditions affecting our industry generally, that may reasonably be expected to have a material impact, favorable or unfavorable, on our revenues or income other than the risk factors disclosed in our Annual Report on Form 10-K, as filed with the SEC on March 25, 2024.
Previous wording
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 wording
Total revenues increased $2,326, or 21.4%, from $10,888 for the three months ended September 30, 2023 to $13,214 for the three months ended September 30, 2024 primarily due to continued strong defense program product and solution shipments.
Previous 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.
Current wording
Gross margin (Revenues less Manufacturing cost of sales as a percentage of Revenues) increased 500 basis points from 42.8% for the three months ended September 30, 2023 to 47.8% for the three months ended September 30, 2024 reflecting higher revenues, improved production efficiencies, and a higher margin product mix.
Previous 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.
Current wording
Total Other income (expense), net increased $74, or 569.2%, from $13 for the three months ended September 30, 2023 to $87 for the three months ended September 30, 2024. The increase was primarily due to a $62, or 6,200.0%, increase in Interest income (expense), net from $1 for the three months ended September 30, 2023 to $63 for the three months ended September 30, 2024 from higher interest income earned on investments in money market mutual funds.
Previous 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.
Current wording
Income tax expense increased $281, or 61.1%, from $460 for the three months ended September 30, 2023 to $741 for the three months ended September 30, 2024 primarily due to the increase in Income before income taxes driven by the increase in revenues discussed above.
Previous wording
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 wording
Total revenues increased $5,812, or 19.1%, from $30,395 for the nine months ended September 30, 2023 to $36,207 for the nine months ended September 30, 2024 primarily due to continued strong defense program product and solution shipments.
Previous wording
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 wording
Gross margin (Revenues less Manufacturing cost of sales as a percentage of Revenues) increased 610 basis points from 39.7% for the nine months ended September 30, 2023 to 45.8% for the nine months ended September 30, 2024 reflecting higher revenues, improved production efficiencies, and a higher margin product mix.
Previous wording
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 wording
Income tax expense increased $589, or 63.3%, from $931 for the nine months ended September 30, 2023 to $1,520 for the nine months ended September 30, 2024 primarily due to the increase in Income before income taxes driven by the increase in revenues discussed above.
Previous 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.
Current wording
As of September 30, 2024, our order backlog was $39,763, a decrease of $8,068, or 16.9%, from $47,831 as of December 31, 2023 and a decrease of $10,517, or 20.9%, from $50,280 as of September 30, 2023. The decrease in backlog from December 31, 2023 reflects the continued strategy and focus on securing large, long duration program centric business, which can materially affect backlog due to the timing and size of these orders.
Previous wording
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 wording
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 as well as a more accurate view of the Company's ability to generate cash profits:
Previous wording
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 wording
Adjusted EBITDA increased $964 from $2,336 for the three months ended September 30, 2023 to $3,300 for the three months ended September 30, 2024 primarily due to improved gross margins and continued containment of operating expenses, resulting in higher income before taxes; higher depreciation; and higher stock-based compensation partially offset by higher interest income.
Previous wording
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.
Current wording
Adjusted EBITDA increased $2,790 from $5,295 for the nine months ended September 30, 2023 to $8,085 for the nine months ended September 30, 2024 primarily due to higher gross margins and continued containment of operating expenses, resulting in higher income before taxes; higher depreciation; and higher stock-based compensation partially offset by higher interest income.
Previous wording
As of June 30, 2024 and December 31, 2023, Cash and cash equivalents were $6,501 and $3,913, respectively.
Current wording
As of September 30, 2024 and December 31, 2023, Cash and cash equivalents were $8,490 and $3,913, respectively.
Previous 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:
Current wording
Cash provided by operating activities was $5,707 for the nine months ended September 30, 2024 compared to cash provided by operating activities of $2,273 for the nine months ended September 30, 2023, an increase of $3,434, primarily due to the following:
Previous 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.
Current wording
Cash used in investing activities was $1,473 for the nine months ended September 30, 2024 compared to cash used in investing activities of $565 for the nine months ended September 30, 2023, an increase of $908, primarily due to the purchase of equipment to support growth, next generation product development, and operational efficiencies during the nine months ended September 30, 2024.
Previous 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.
Current wording
Cash provided by financing activities was $343 for the nine months ended September 30, 2024 compared to cash used in financing activities of $82 for the nine months ended September 30, 2023, an increase of $425, primarily due to the exercise of stock options.