M-tron Industries, Inc.
For the period ended Dec 31, 2024. Filed Mar 27, 2025.
View on SEC.govAbout this filing
A company's yearly report to the SEC, with audited financial statements. It is the fullest account a company gives of its business, its finances and the risks it sees.
FY2024 · Filed Mar 27, 2025
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-K
Period ended 2023-12-31; filed 2024-03-25.
0001437749-24-009243
Item 7. Management's Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-K
Period ended 2024-12-31; filed 2025-03-27.
0001437749-25-009645
Item 7. 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 52 previous paragraphs and 71 current paragraphs.
14 unchanged; 11 reworded; 46 added; 27 removed; 0 previous and 0 current paragraphs rearranged.
Tables are not compared: 3 previous and 18 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 (46)
Current report
Unless otherwise stated, all dollar amounts are in thousands.
Current report
For a discussion of the year ended December 31, 2023 compared to the year ended December 31, 2022, refer to Part II, Item 7, "Management's Discussion and Analysis of Financial Condition and Results of Operations" in our Annual Report on Form 10-K for the year ended December 31, 2023, filed with the SEC on March 25, 2024, which is available free of charge on the SEC's website at https://www.sec.gov and on our website at ir.mtronpti.com.
Current report
Trends and Uncertainties
Current report
The following table presents our Consolidated Statements of Operations for the periods indicated:
Current report
Total Revenues
Current report
Total revenues increased $7,844, or 19.1%, from $41,168 in 2023 to $49,012 in 2024 primarily due to strong defense program product and solution shipments.
Current report
Total Costs and Expenses
Current report
Total costs and expenses increased $2,749, or 7.5%, from $36,869 in 2023 to $39,618 in 2024 primarily due to:
Current report
Gross Margin
Current report
Gross margin (Revenues less Manufacturing cost of sales as a percentage of Revenues) increased 550 basis points from 40.7% in 2023 to 46.2% in 2024 reflecting higher revenues, improved manufacturing efficiencies, and a higher margin product mix.
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Total Other Income, Net
Current report
Total other income, net increased $280, or 277.2%, from $101 in 2023 to $381 in 2024 primarily due to a $236 increase in Interest income, net from $7 in 2023 to $243 in 2024 driven by higher interest income earned related to an increase in balances invested in money market mutual funds.
Current report
Income Tax Expense
Current report
Income tax expense increased $1,228, or 134.8%, from $911 in 2023 to $2,139 in 2024 primarily due to the increase in Income before income taxes driven by the increase in revenues discussed above.
Current report
Backlog
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As of December 31, 2024, our order backlog was $47,239, a decrease of $592, or 1.2%, from $47,831 as of December 31, 2023. The decrease in backlog from December 31, 2023 reflects the nature of a program centric business model, which can materially affect backlog based on the timing and size of these orders.
Current report
Non-GAAP Financial Measures
Current report
To supplement our 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
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
Three months ended December 31, 2024 compared to three months ended December 31, 2023
Current report
Adjusted EBITDA increased $659 from $2,397 for the three months ended December 31, 2023 to $3,056 for the three months ended December 31, 2024. The increase was primarily due to improved gross margins, continued containment of expenses, a higher margin product mix, and decrease in non-cash stock compensation.
Current report
Year ended 2024 compared to Year ended 2023
Current report
Adjusted EBITDA increased $3,449 from $7,692 in 2023 to $11,141 in 2024. The increase was primarily due to improved gross margins and continued containment of expenses, a higher margin product mix, and a decrease in non-cash stock compensation.
Current report
Overview
Current report
Liquidity refers to our ability to access sufficient sources of cash to meet the requirements of our operating, investing and financing activities.
Current report
Capital refers to our long-term financial resources available to support business operations and future growth.
Current report
Our ability to generate and maintain sufficient liquidity and capital depends on the profitability of the business, timing of cash flows, general economic conditions and access to the capital markets and the other sources of liquidity and capital described herein.
Current report
Cash Flow Activity
Current report
The following table presents the cash flow activity for the period indicated:
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Operating Activities
Current report
Cash provided by operating activities was $7,521 in 2024 compared to $4,405 in 2023, an increase of $3,116 primarily due to the following:
Current report
The increase was partially offset by the following:
Current report
Our working capital metrics were as follows:
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Investing Activities
Current report
Cash used in investing activities was $1,898 in 2024 compared to $1,281 in 2023, an increase of $617 primarily due to the purchase of equipment to support growth and next generation product development.
Current report
Financing Activities
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Cash provided by (used in) financing activities was $3,105 in 2024 compared to ($137) in 2023, an increase of $3,242 primarily due to the exercise of stock options awarded in December 2023.
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Capital Resources
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Contractual Obligations
Current report
The following table summarizes contractual obligations, in total, and by remaining maturity:
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Removed paragraphs (27)
Previous report
Factors Which May Influence Results of Operations
Previous report
Inflation and Rising Interest Rates
Previous report
During 2023, inflation in the United States moderated and, as of the date of this Report, is currently expected to fall slightly in the near-term. Inflation and the resulting higher interest rates may have an adverse impact on our Loan Agreement and general 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 four times during 2023, with their last increase in July of 2023, resulting in a range from 5.25% to 5.50% as of December 31, 2023. It is expected that the Federal Reserve may ease the federal funds rate during 2024 to, among other things, control unemployment while balancing the risks of inflation. As a result, to the extent our exposure to increases in interest rates is not eliminated through interest rate swaps or other protection agreements, such increases may result in higher debt service costs, which will adversely affect our cash flows.
Previous report
Consolidated Revenues, Gross Margin and Backlog
Previous report
Total revenues for the year ended December 31, 2023 were $41,168,000, an increase of $9,323,000, or 29.3%, from $31,845,000 for the year ended December 31, 2022. The increase in revenue reflects strong aerospace and defense product shipments.
Previous report
Consolidated gross margin, which is consolidated revenues less manufacturing cost of sales as a percentage of revenues, improved to 40.7% for the year ended December 31, 2023 compared to 35.6% for the prior year. Gross margins improved in 2023 as compared to 2022 due to increased business volume and the effects of product mix changes, offset by inflationary headwinds due to labor and materials cost increases on long term contracts.
Previous report
As of December 31, 2023, our order backlog was $47,831,000, an increase of 3.6% compared to $46,180,000 as of December 31, 2022. Strong 2023 bookings of $42,818,000 following very strong 2022 bookings of $48,586,000 from the effect of increased aerospace and defense orders, drove the improvement. This booking trend in excess of our product shipments reflects strong aerospace and defense orders, most of which are expected to ship during 2024 and into 2025.
Previous report
Engineering, Selling and Administrative Expenses
Previous report
Engineering, selling and administrative expenses for 2023 included a one-time stock option grant to employees for which the Company recognized a stock-based compensation expense of $2,013,000. The Board approved a one-time grant of 183,300 shares to all 185 full-time employees below the officer level with the quantity of shares for each determined based upon their length of time with the Company. This grant was made to align the interests of our employees with those of our stockholders, and to recognize and reward our valued employees for their past and continuing dedication and service to MtronPTI. It is our employees whose present and future contributions will help ensure the continued success of the organization. See Note G - Stock-Based Compensation to the Consolidated and Combined Financial Statements included in Item 8. Financial Statements and Supplementary Data of this Report for additional details on stock option grants.
Previous report
Details for engineering, selling and administrative expenses are as follows:
Previous report
Engineering, selling and administrative costs increased $3,996,000 for the year ended December 31, 2023 compared to the year ended December 31, 2022, as a result of $210,000 of increased engineering costs supporting MtronPTI's research and development activities, $225,000 of increased sales costs due to the increase in revenues, and $3,561,000 of increased administrative costs for 2023. Administrative costs included the impact from the one-time employee stock option grant of $2,013,000, increased legal and SEC costs of $841,000, increased salaries and employee benefits of $579,000 along with increased audit and tax costs of $71,000 and general insurance and other cost increases of $56,000. The legal and SEC cost increase of $841,000 represents the incremental direct costs of being a public company, without comparable amounts from the prior year when results were presented on a standalone basis. Employee compensation and benefit costs were higher due primarily to increased bonuses of $505,000, higher salaries and benefits of $322,000, offset by reduced stock-based compensation expenses of $248,000, excluding the one-time stock option grant noted above. Audit and tax costs increased primarily due to the costs of being a standalone public company.
Previous report
Operating Income
Previous report
The Company reported an operating income of $4,299,000 for the year ended December 31, 2023 compared to operating income of $2,875,000 for the year ended December 31, 2022. This increase reflects the higher revenues and effects from product mix changes, offset by increased engineering, selling and administrative expenses, which were 30.3% of revenue for the year ended December 31, 2023, compared to 26.6% of revenue for the year ended December 31, 2022.
Previous report
Total Other Income (Expense), Net
Previous report
Total other income (expense), net was income of $100,000 for the year ended December 31, 2023 compared to expense of $280,000 for the year ended December 31, 2022, primarily reflecting excess Separation costs of $219,000 in 2022 which represented 50% of the excess Separation costs which MtronPTI agreed to share with LGL Group (See Note B – Related Party Transactions to the Consolidated and Combined Financial Statements included in Item 8. Financial Statements and Supplementary Data of this Report), along with the impact from currency changes.
Previous report
Income Tax Provision
Previous report
We must make certain estimates and judgments in determining income tax expense for financial statement purposes. These estimates and judgments occur in the calculation of tax credits, tax benefits and deductions and in the calculation of certain tax assets and liabilities, which arise from differences in the timing of recognition of revenue and expense for tax and financial statement purposes. Significant changes to these estimates may result in an increase or decrease to the tax provision in a subsequent period.
Previous report
We recorded a tax provision of $911,000 and $797,000 for the years ended December 31, 2023 and 2022, respectively. The income tax provision is based on an estimated annual effective tax rate across the jurisdictions in which we operate.
Previous report
Net Income
Previous report
Net income was $3,489,000 for the year ended December 31, 2023 compared to $1,798,000 for the year ended December 31, 2022. Basic and diluted net income per share for the year ended December 31, 2023 was $1.29 and $1.28, respectively, and for the year ended December 31, 2022 basic and diluted net income per share was $0.67.
Previous report
Adjusted EBITDA (as defined below) was $2,425,000 for the quarter ended December 31, 2023 versus $1,114,000 for the quarter ended December 31, 2022, a portion of which was reported on a standalone basis. Adjusted EBITDA was $7,692,000 for the year ended December 31, 2023 versus $4,008,000 for the year ended December 31, 2022, a portion of which was reported on a standalone basis. Adjusted EBITDA excluded excess Separation costs of $28,000 for 2023 and $219,000 for 2022. Included within the non-cash stock compensation is $2,013,000 for the impact from the one-time employee stock option grant. Note that adjusted EBITDA for the quarter and year ended December 31, 2022 does not include any adjustments for the potential impact from the additional costs of being a publicly traded company. Management calculated the incremental direct costs of being a public company which do not have any comparable amounts in the prior year when results were presented partially on a standalone basis at $106,000 and $841,000 for the quarter and year ended December 31, 2023, respectively.
Previous report
Reconciliations of GAAP to Non-GAAP Measures
Previous report
Cash provided by operating activities was $4,405,000 and $2,042,000 for the years ended December 31, 2023 and 2022, respectively. The increase was largely due to our improved financial results, and a decrease in accounts payable and accrued expenses in 2023 as compared to 2022, partially offset by increases in inventory. Inventory increased due to supply chain constraints and as a result of an increase in our order backlog, while payables and accruals decreased due to the efficient use of available cash.
Previous report
Cash used in investing activities for the years ended December 31, 2023 and 2022 was $1,281,000 and $936,000, respectively, and related entirely to capital expenditures, which were primarily used for new and upgraded production equipment to improve our costs and efficiency.* *
Previous report
Cash used in financing activities for the years ended December 31, 2023 and 2022 was $137,000 and $2,815,000, respectively, with the 2023 amount related to the forfeiture of shares to pay taxes while the 2022 amount resulted almost exclusively from payments to LGL Group and its subsidiaries.
Previous report
We account for unrecognized tax benefits in accordance with ASC 740, which prescribes a minimum probability threshold that a tax position must meet before a financial statement benefit is recognized. The minimum threshold is defined as a tax position that is more likely than not to be sustained upon examination by the applicable taxing authority, including resolution of any related appeals or litigation, based solely on the technical merits of the position. The tax benefit recognized is the largest amount of benefit that is greater than 50% likely of being realized upon ultimate settlement.
Previous report
During the periods prior to the Separation that are presented in the accompanying Consolidated and Combined Financial Statements, the Company's income tax expense was included in LGL Group’s income tax returns. Income tax expense contained in the accompanying Consolidated and Combined Financial Statements for periods prior to the Separation is presented on a separate return basis, as if the Company had filed its own income tax returns. As a result, actual tax transactions included in LGL Group’s consolidated financial statements may or may not be included in the accompanying Consolidated and Combined Financial Statements of the Company. Similarly, the tax treatment of certain items reflected in the accompanying Consolidated and Combined Financial Statements of the Company may or may not be reflected in LGL Group’s consolidated financial statements and income tax returns. The taxes recorded in the accompanying Consolidated and Combined Statements of Operations for periods prior to the Separation are not necessarily representative of the taxes that may arise in the future when the Company files its income tax returns independent from LGL Group's returns. Post-Separation, the Company filed a consolidated U.S. federal income tax return as well as separate and combined income tax returns in various state, local and international jurisdictions. Income tax expense contained in the accompanying Consolidated and Combined Financial Statements for the period after the Separation is based on the consolidated results of the Company on a standalone basis.
Reworded paragraphs (11)
Previous wording
You should read the following discussion and analysis together with our audited consolidated financial statements and the accompanying notes. This discussion contains forward-looking statements, including statements regarding our expected financial position, business and financing plans. These statements involve risks and uncertainties. Our actual results could differ materially from the results described in or implied by these forward-looking statements as a result of various factors, including those discussed below and elsewhere in this Report, particularly under the headings "Caution Concerning Forward-Looking Statements" and "Risk Factors”.
Current wording
You should read the following discussion and analysis together with our audited consolidated financial statements and the accompanying notes. This discussion contains forward-looking statements, including statements regarding our expected financial position, business and financing plans. These statements involve risks and uncertainties. Our actual results could differ materially from the results described in or implied by these forward-looking statements as a result of various factors, including those discussed below and elsewhere in this Report, particularly under the headings "Cautionary Statement Concerning Forward-Looking Statements" and "Risk Factors*."*
Previous wording
MtronPTI is engaged in the designing, manufacturing and marketing of highly-engineered, high reliability frequency and spectrum control products used to control the frequency or timing of signals in electronic circuits in various applications. MtronPTI’s primary markets are aerospace and defense, space, and avionics.
Current wording
Mtron is engaged in the designing, manufacturing and marketing of highly-engineered, high reliability frequency and spectrum control products used to control the frequency or timing of signals in electronic circuits in various applications. Mtron’s primary markets are aerospace and defense, space, and avionics.
Previous wording
The backlog of unfilled orders includes amounts based on signed contracts and purchase orders, which are likely to be fulfilled substantially within the next 12 to 24 months. Order backlog is adjusted quarterly to reflect project cancellations, deferrals, revised project scope and cost. We expect to fill a substantial portion of our order backlog as of December 31, 2023 during 2024 and 2025, but cannot provide assurances as to what portion of the order backlog will be fulfilled in any given year.
Current wording
The backlog of unfilled orders includes amounts based on signed contracts and purchase orders, which are likely to be fulfilled substantially within the next 12 to 24 months. Order backlog is adjusted quarterly to reflect project cancellations, deferrals, revised project scope and cost. We expect to fill the vast majority of our order backlog as of December 31, 2024 during 2025 and 2026, but cannot provide assurances as to what portion of the order backlog will be fulfilled in any given year.
Previous wording
To supplement our consolidated financial statements presented on a GAAP basis, the Company uses certain non-GAAP measures, including Adjusted EBITDA, which we define as net income before income taxes adjusted to exclude depreciation and amortization expense, interest income and expense, stock-based compensation expense, and other items we believe are discrete events which have a significant impact on comparable GAAP measures and could distort an evaluation of our normal operating performance. These adjustments to our GAAP results are made with the intent of providing both management and investors with a more complete understanding of the underlying operational results and trends and our marketplace performance. 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 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 profits:
Previous wording
Adjusted EBITDA (a Non-GAAP Measure)
Current wording
The following table presents a reconciliation of income before income taxes to Adjusted EBITDA, a non-GAAP measure:
Previous wording
As of December 31, 2023 and 2022, cash and cash equivalents were $3,913,000 and $926,000, respectively. The increase was due to our financial results following the Separation, as the cash balance at Separation exceeding $1,000,000 was retained by LGL Group.
Current wording
As of December 31, 2024 and 2023, Cash and cash equivalents were $12,641 and $3,913, respectively.
Previous wording
As of December 31, 2023, our consolidated working capital was $13,803,000, compared to $9,458,000 as of December 31, 2022. As of December 31, 2023, we had current assets of $18,187,000, current liabilities of $4,384,000 and a ratio of current assets to current liabilities of 4.15 to 1.00. As of December 31, 2022, we had current assets of $14,314,000, current liabilities of $4,856,000 and a ratio of current assets to current liabilities of 2.95 to 1.00. Management continues to focus on efficiently managing working capital requirements to match operating activity levels and will seek to deploy the Company’s working capital where it will generate the greatest returns.
Current wording
Management continues to focus on efficiently managing working capital requirements to match operating activity levels and will seek to deploy the Company’s working capital where it will generate the greatest returns.
Previous wording
We believe that existing cash and cash equivalents, marketable securities and cash generated from operations will provide sufficient liquidity to meet our ongoing working capital and capital expenditure requirements for the next 12 months from the date of this filing. The Company’s management continues to strive for profitability both internally and through acquisition.
Current wording
We believe that existing cash and cash equivalents, marketable securities and cash generated from operations will provide sufficient liquidity to meet our ongoing working capital and capital expenditure requirements for the next 12 months from the date of this filing and for the foreseeable future. The Company’s management continues to strive for profitability both internally and through acquisition.
Previous wording
On June 15, 2022, we entered into a loan agreement (the “Loan Agreement”) for a revolving line of credit with Fifth Third Bank, National Association, for up to $5.0 million bearing interest at SOFR plus a margin of 2.25%, with a SOFR floor of 0.00%. The Loan Agreement has a maturity date of June 15, 2025 and contains certain financial covenants based on the following criteria: (a) Minimum Fixed Charge Coverage Ratio; (b) Minimum Current Ratio; and (c) Minimum Tangible Net Worth (each as defined in the Loan Agreement). All loans pursuant to the Loan Agreement will be secured by a continuing and unconditional first priority security interest in and to any and all property of the Company. See Note E – Revolving Credit Agreement to the Consolidated and Combined Financial Statements included in Item 8. Financial Statements and Supplementary Data of this Report for details of the Loan Agreement.
Current wording
On June 15, 2022, we entered into a loan agreement (the "Loan Agreement") for a revolving line of credit with Fifth Third Bank, National Association, for up to $5.0 million bearing interest at SOFR plus a margin of 2.25%, with a SOFR floor of 0.00%. The Loan Agreement has a maturity date of June 15, 2025 and contains certain financial covenants based on the following criteria: (a) Minimum Fixed Charge Coverage Ratio; (b) Minimum Current Ratio; and (c) Minimum Tangible Net Worth (each as defined in the Loan Agreement). All loans pursuant to the Loan Agreement will be secured by a continuing and unconditional first priority security interest in and to any and all property of the Company. See Note 5 – Revolving Credit Agreement to the Consolidated Financial Statements included in Item 8. Financial Statements and Supplementary Data of this Report for details of the Loan Agreement.
Previous wording
Our consolidated financial statements are prepared in accordance with GAAP. Our significant accounting policies are more fully described in Note A – Description of Business, Basis of Presentation and Summary of Significant Accounting Policies to the Consolidated and Combined Financial Statements included in Item 8. Financial Statements and Supplementary Data of this Report. Certain accounting policies require us to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenue and expense during the reporting period. On an ongoing basis, we evaluate our estimates and assumptions, and the effects of revisions are reflected in the financial statements in the period in which they are determined to be necessary. The accounting policies described below are those that most frequently require us to make estimates and judgments and, therefore, are critical to understanding our results of operations.
Current wording
Our consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States ("U.S. GAAP"). Our significant accounting policies are more fully described in Note 2 – Summary of Significant Accounting Policies in the accompanying Notes to the Consolidated Financial Statements included in Item 8. Financial Statements and Supplementary Data of this Report. Certain accounting policies require us to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenue and expense during the reporting period. On an ongoing basis, we evaluate our estimates and assumptions, and the effects of revisions are reflected in the financial statements in the period in which they are determined to be necessary. The accounting policies described below are those that most frequently require us to make estimates and judgments and, therefore, are critical to understanding our results of operations.
Previous wording
We account for income taxes in accordance with Accounting Standards Codification Topic 740 “Income Taxes” (“ASC 740”), which requires an asset and liability approach for the financial accounting and reporting of income taxes. Under this method, deferred income taxes are recognized for the expected future tax consequences of differences between the tax bases of assets and liabilities and their reported amounts in the financial statements. These balances are measured using the enacted tax rates expected to apply in the year(s) in which these temporary differences are expected to reverse. The effect of a change in tax rates on deferred income taxes is recognized in income in the period when the change is enacted.
Current wording
We account for income taxes in accordance with Financial Accounting Standards Board ("FASB") Accounting Standards Codification ("ASC") Topic 740,Income Taxes ("ASC 740"), which requires an asset and liability approach for the financial accounting and reporting of income taxes. Under this method, deferred income taxes are recognized for the expected future tax consequences of differences between the tax bases of assets and liabilities and their reported amounts in the financial statements. These balances are measured using the enacted tax rates expected to apply in the year(s) in which these temporary differences are expected to reverse. The effect of a change in tax rates on deferred income taxes is recognized in income in the period when the change is enacted.