M-tron Industries, Inc.

Previous wording

The following discussion and analysis of the Company's financial condition and results of operations should be read in conjunction with the accompanying unaudited Condensed Consolidated Financial Statements, the notes thereto and the other unaudited financial data included in this Quarterly Report on Form 10-Q. The following discussion should also be read in conjunction with the audited Consolidated and Combined Financial Statements and the notes thereto, and "Management's Discussion and Analysis of Financial Condition and Results of Operations" included in our Annual Report on Form 10-K, as filed with the Securities and Exchange Commission (the "SEC") on March 25, 2024. The terms the "Company," "MtronPTI,"* "*MPTI," "we," "our" or "us" refer to M-tron Industries, Inc. and unless otherwise defined herein, capitalized terms used herein shall have the same meanings as set forth in our Condensed Consolidated Financial Statements and the notes thereto.

Current wording

The following discussion and analysis of the Company's financial condition and results of operations should be read in conjunction with the accompanying unaudited Condensed Consolidated Financial Statements, the notes thereto and the other unaudited financial data included in this Quarterly Report on Form 10-Q. The following discussion should also be read in conjunction with the audited Consolidated and Combined Financial Statements and the notes thereto, and "Management's Discussion and Analysis of Financial Condition and Results of Operations" included in our Annual Report on Form 10-K, as filed with the Securities and Exchange Commission (the "SEC") on March 27, 2025. The terms the "Company,", "Mtron,"* *"MPTI," "we," "our," or "us" refer to M-tron Industries, Inc. and unless otherwise defined herein, capitalized terms used herein shall have the same meanings as set forth in our Condensed Consolidated Financial Statements and the notes thereto.

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 defense, aerospace, 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 defense, aerospace, space, and avionics.

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 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 one listed below and the risk factors disclosed in our Annual Report on Form 10-K, as filed with the SEC on March 27, 2025.

Previous 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.

Current wording

Gross margin (Revenues less Manufacturing cost of sales as a percentage of Revenues) decreased 27 basis points from 42.7% for the three months ended March 31, 2024 to 42.5% for the three months ended March 31, 2025 reflecting higher revenues and the increase in production of several new products, which resulted in higher initial manufacturing costs.

Previous 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.

Current wording

Income tax expense increased $107, or 28.4%, from $377 for the three months ended March 31, 2024 to $484 for the three months ended March 31, 2025 primarily due to the increase in Income before income taxes driven by the increase in revenues discussed above.

Previous 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.

Current wording

As of March 31, 2025, our order backlog was $55,501, an increase of $8,262, or 17.5%, from $47,239 as of December 31, 2024 and an increase of $9,371, or 20.3%, from $46,130 as of March 31, 2024. The increase in backlog from December 31, 2024 is primarily due to several large orderes received during the quarter. The nature of a program centric business model materially affects backlog based on the timing and size of the orders.

Previous 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.

Current wording

Adjusted EBITDA increased $240 from $2,262 for the three months ended March 31, 2024 to $2,502 for the three months ended March 31, 2025 primarily due to higher revenues and continued containment of operating expenses partially offset by higher interest income.

Previous wording

As of September 30, 2024 and December 31, 2023, Cash and cash equivalents were $8,490 and $3,913, respectively.

Current wording

As of March 31, 2025 and December 31, 2024, Cash and cash equivalents were $13,662 and $12,641, respectively.

Previous 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:

Current wording

Cash provided by operating activities was $1,607 for the three months ended March 31, 2025 compared to cash provided by operating activities of $1,496 for the three months ended March 31, 2024, an increase of $111, primarily due to the following:

Previous 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.

Current wording

Cash used in investing activities was $586 for the three months ended March 31, 2025 compared to cash used in investing activities of $122 for the three months ended March 31, 2024, an increase of $464, primarily due to the timing of purchases of equipment.

Previous 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.

Current wording

Cash provided by financing activities was $0 for the three months ended March 31, 2025 compared to cash provided by financing activities of $127 for the three months ended March 31, 2024, a decrease of $127, primarily due to the exercise of stock options by an executive officer in 2024.