LGL GROUP INC
For the period ended Mar 31, 2025. Filed May 15, 2025.
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.
Mar 31, 2025 · Filed May 15, 2025
LGL$6.63+1.2%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-09-30; filed 2024-11-13.
0001437749-24-034944
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2025-03-31; filed 2025-05-15.
0001437749-25-017244
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 89 previous paragraphs and 66 current paragraphs.
48 unchanged; 9 reworded; 8 added; 26 removed; 6 previous and 1 current paragraphs rearranged.
Tables are not compared: 25 previous and 11 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 (8)
Current report
Tariffs
Current report
The current U.S. federal administration has imposed tariffs on certain products and materials entering the United States imported from other countries. Additionally, foreign governments have imposed retaliatory tariffs on products and materials exported from the United States. The increase in tariffs could have an adverse impact on Manufacturing cost of sales as these tariffs could increase our costs at a higher rate than our revenues, the extent of which is unknown as the Company is pursuing various avenues to reduce the potential impact.
Current report
Total revenues increased $30, or 3.4%, from $888 for the three months ended March 31, 2024 to $918 for the three months ended March 31, 2025. The increase was primarily due to a $106, or 27.0%, increase in Net sales from $392 for the three months ended March 31, 2024 to $498 for the three months ended March 31, 2025 primarily due to higher backlog as of December 31, 2024.
Current report
The increase is partially offset by a $82, or 16.4%, decrease in Net investment income from $499 for the three months ended March 31, 2024 to $417 for the three months ended March 31, 2025 primarily due to lower yields on investments in U.S. Treasury money market funds.
Current report
Total expenses increased $68, or 8.4%, from $809 for the three months ended March 31, 2024 to $877 for the three months ended March 31, 2025. The following items contributed to the increase:
Current report
Income tax expense decreased $8, or 22.2%, from $36 for the three months ended March 31, 2024 to $28 for the three months ended March 31, 2025 primarily due to the decrease in Income from continuing operations.
Current report
Income from continuing operations before income taxes increased $17, or 850.0%, from $2 for the three months ended March 31, 2024 to $19 for the three months ended March 31, 2025. The increase was primarily due to a $106, or 27.0%, increase in Net sales reflecting higher backlog as of December 31, 2024 partially offset by the $89, or 22.8%, increase in Total expenses driven by higher Manufacturing cost of sales as well as engineering and sales and marketing costs.
Current report
Income from continuing operations before income taxes decreased $87 from $240 for the three months ended March 31, 2024 to $153 for the three months ended March 31, 2025 due to lower yields on investments in U.S. Treasury money market funds as well as higher corporate allocations.
Removed paragraphs (26)
Previous report
Market Conditions and Search Process
Previous report
During the nine months ended September 30, 2024, mergers and acquisitions continued to be impacted by macroeconomic conditions such as higher borrowing costs, increased regulatory scrutiny, political uncertainty, and higher valuation expectations. The initial public offering ("IPO") market has been relatively weak with continued pressure on private equity sponsors to monetize their portfolio companies, which has improved the pace and quality of deal flow to our team.
Previous report
Our search process leverages our professional networks and relationships, participation in industry events and conferences, monitoring of industry trends and news, and interactions with our shareholders, investment banks, and other intermediaries. We continue to seek small- to mid-sized opportunities with strong cash flow generating capacity that trade at reasonable multiples with competitive products or services and with defensible market positions or intellectual property.
Previous report
Total revenues increased $201, or 20.6%, from $978 for the three months ended September 30, 2023 to $1,179 for the three months ended September 30, 2024. The increase was primarily driven by a $212, or 48.4%, increase in Net sales from $438 for the three months ended September 30, 2023 to $650 for the three months ended September 30, 2024 primarily due to higher product shipments during Q3 2024.
Previous report
Total expenses increased $262, or 33.6%, from $779 for the three months ended September 30, 2023 to $1,041 for the three months ended September 30, 2024. The following items contributed to the overall increase:
Previous report
Nine months ended September 30, 2024 compared to nine months ended September 30, 2023
Previous report
Total Revenues
Previous report
Total revenues increased $452, or 16.8%, from $2,683 for the nine months ended September 30, 2023 to $3,135 for the nine months ended September 30, 2024. The following items contributed to the overall increase:
Previous report
The increase was partially offset by a $390, or 101.6%, decrease in Net gains (losses) from $384 for the nine months ended September 30, 2023 to ($6) for the nine months ended September 30, 2024 primarily due to lower mark-to-market movements and no sales of Marketable securities.
Previous report
Total Expenses
Previous report
Total expenses increased $315, or 13.3%, from $2,366 for the nine months ended September 30, 2023 to $2,681 for the nine months ended September 30, 2024. The following items contributed to the overall increase:
Previous report
Gross Margin
Previous report
Gross margin (Net sales less Manufacturing cost of sales as a percentage of Net sales) decreased 360 basis points from 53.6% for the nine months ended September 30, 2023 to 50.0% for the nine months ended September 30, 2024 reflecting sales of lower margin products.
Previous report
Income Tax Expense
Previous report
Income tax expense increased $28, or 21.2%, from $132 for the nine months ended September 30, 2023 to $160 for the nine months ended September 30, 2024 primarily due to the increase in Income from continuing operations.
Previous report
Net income attributable to non-controlling interests increased $42, or 190.9%, from $22 for the nine months ended September 30, 2023 to $64 for the nine months ended September 30, 2024 primarily due to the consolidation of LGL Systems in June 2023, which has minority shareholders.
Previous report
The decrease was partially offset by a $212, or 48.4%, increase in Net sales reflecting higher product shipments during Q3 2024 and higher backlog as of June 30, 2024.
Previous report
Income from continuing operations before income taxes decreased $44, or 26.8%, from $164 for the three months ended September 30, 2023 to $120 for the three months ended September 30, 2024. The decrease was primarily due to:
Previous report
The decrease was partially offset by a $291, or 22.7%, increase in Net sales driven by operational efficiencies and higher product shipments.
Previous report
Income from continuing operations before income taxes increased $5, or 2.2%, from $223 for the three months ended September 30, 2023 to $228 for the three months ended September 30, 2024. The increase was primarily due to:
Previous report
Income from continuing operations before income taxes increased $315, or 80.8%, from $390 for the nine months ended September 30, 2023 to $705 for the nine months ended September 30, 2024. The increase was primarily due to a $380, or 70.1%, increase in Net investment income related to the commencement of operations of Lynch Capital International, LLC in June 2023 partially offset by a $65, or 42.8%, increase in Engineering, selling, and administrative driven by higher corporate-level expenses allocated to the Merchant Investment segment.
Previous report
Loss from continuing operations before income taxes increased $40, or 42.6%, from $94 for the three months ended September 30, 2023 to $134 for the three months ended September 30, 2024. The increase was primarily due to a $44, or 17.1%, decrease in Net investment income reflecting lower balances invested in United States Treasury money market funds partially offset by a $2, or 0.6%, decrease in Engineering, selling and administrative related to changes in headcount and higher wages and benefits.
Previous report
Loss from continuing operations before income taxes increased $134, or 56.5%, from ($237) for the nine months ended September 30, 2023 to ($371) for the nine months ended September 30, 2024. The increase was primarily due to a $390, or 101.6%, decrease in Net (losses) gains as there were lower mark-to-market movements and sales of Marketable securities during the nine months ended September 30, 2024.
Previous report
The increase was partially offset by:
Previous report
Investing Activities
Previous report
Cash provided by investing activities was $0 for the nine months ended September 30, 2024 compared to cash provided by investing activities of $18,816 for the nine months ended September 30, 2023, a decrease of $18,816, primarily due to sales of IronNet, Inc. during the nine months ended September 30, 2023.
Reworded paragraphs (9)
Previous wording
As of September 30, 2024, LGL Group had investments (classified within Cash and cash equivalents and Marketable securities) with a fair value of approximately $41.2 million, of which $24.3 million was held within the Merchant Investment business. The Company accounts for its Marketable securities under Financial Accounting Standards Board ("FASB") Accounting Standards Codification ("ASC") Topic 321,Investments - Equity Securities ("ASC 321") and as such, its Marketable securities are reported at fair value on its Condensed Consolidated Balance Sheets.
Current wording
As of March 31, 2025, LGL Group had investments (classified within Cash and cash equivalents and Marketable securities) with a fair value of approximately $24.9 million. The Company accounts for its Marketable securities under Financial Accounting Standards Board ("FASB") Accounting Standards Codification ("ASC") Topic 321,Investments - Equity Securities ("ASC 321") and as such, its Marketable securities are reported at fair value on its consolidated balance sheets.
Previous wording
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 filing of this Quarterly Report on Form 10-Q, the U.S. Federal Reserve decreased the federal funds rate twice totaling 75 basis points to a range of 4.50% to 4.75%. It is expected that the U.S. Federal Reserve will continue to decrease the federal funds rate during 2024 and 2025 to, among other things, control inflation; however, the timing of any future decreases remains unclear. If interest rates continue to decline, the returns generated by our investments in U.S. Treasuries could be adversely impacted.
Current wording
The U.S. Federal Reserve decreased the federal funds rate a total of four times throughout 2024, resulting in a range from 4.25% to 4.50% as of December 31, 2023. Through the date of filing 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, 2024. It is expected that the U.S. Federal Reserve will continue to decrease the federal funds rate during 2025; however, the timing of any such decrease remains unclear. If interest rates continue to decline, the returns generated by our investments in U.S. Treasuries could be adversely impacted.
Previous wording
Gross margin (Net sales less Manufacturing cost of sales as a percentage of Net sales) decreased 1,210 basis points from 55.5% for the three months ended September 30, 2023 to 43.4% for the three months ended September 30, 2024 reflecting sales of lower margin products.
Current wording
Gross margin (Net sales less Manufacturing cost of sales as a percentage of Net sales) increased 450 basis points from 48.0% for the three months ended March 31, 2024 to 52.4% for the three months ended March 31, 2025 reflecting a higher margin product mix.
Previous wording
Net income attributable to non-controlling interests decreased $4, or 18.2%, from $22 for the three months ended September 30, 2023 to $18 for the three months ended September 30, 2024 primarily due to lower Net income from LGL Systems in 2024 than in 2023.
Current wording
Net income attributable to non-controlling interests decreased $3 from $22 for the three months ended March 31, 2024 to $19 for the three months ended March 31, 2025 primarily due to lower yields on U.S. Treasury money market funds.
Previous wording
As of September 30, 2024, our order backlog was $505, an increase of $362, or 253.1%, from $143 as of December 31, 2023 and an increase of $192, or 61.3%, from $313 as of September 30, 2023. The backlog of unfilled orders includes amounts based on signed contracts likely to be fulfilled largely in the next 12 months but usually will ship within the next 90 days. Order backlog is adjusted quarterly to reflect project cancellations, deferrals, and revised project scope and cost, if any.
Current wording
As of March 31, 2025, our order backlog was $295, a decrease of $41, or 12.2%, from $336 as of December 31, 2024 and a decrease of $46, or 13.5%, from $341 as of March 31, 2024. The backlog of unfilled orders includes amounts based on signed contracts likely to be fulfilled largely in the next 12 months but usually will ship within the next 90 days. Order backlog is adjusted quarterly to reflect project cancellations, deferrals, and revised project scope and cost, if any.
Previous wording
Income tax expense decreased $21, or 30.4%, from $69 for the three months ended September 30, 2023 to $48 for the three months ended September 30, 2024 primarily due to the increase in Income from continuing operations.
Current wording
Income from Continuing Operations Before Income Taxes
Previous wording
Income from continuing operations before income taxes decreased $26, or 37.1%, from $70 for the three months ended September 30, 2023 to $44 for the three months ended September 30, 2024. The decrease: was primarily due to:
Current wording
Loss from continuing operations before income taxes decreased $32, or 19.6%, from ($163) for the three months ended March 31, 2024 to ($131) for the three months ended March 31, 2025. The decrease was primarily due to lower yields on investments in U.S. Treasury money market funds partially offset by higher corporate allocations to the Merchant Investment and Electronic Instruments segments.
Previous wording
As of September 30, 2024 and December 31, 2023, Cash and cash equivalents were $41,602 and $40,711, respectively.
Current wording
As of March 31, 2025 and December 31, 2024, Cash and cash equivalents were $41,925 and $41,585, respectively.
Previous wording
Cash provided by operating activities was $891 for the nine months ended September 30, 2024 compared to cash used in operating activities of $454 for the nine months ended September 30, 2023, an increase of $437, primarily due to a $390 decrease in Net gains (losses) from $384 for the nine months ended September 30, 2023 to ($6) for the nine months ended September 30, 2024 as there were lower mark-to-market movements and no sales of Marketable securities during the nine months ended September 30, 2024 partially offset by a $94 decrease in the net change in operating assets and liabilities from $617 for the nine months ended September 30, 2023 to $523 for the nine months ended September 30, 2024.
Current wording
Cash provided by operating activities was $340 for the three months ended March 31, 2025 compared to $160 for the three months ended March 31, 2024, an increase of $180, primarily due to:
Rearranged current paragraphs (1)
Current report — wording carried from elsewhere
Income from Continuing Operations Before Income Taxes
Rearranged previous paragraphs (6)
Previous report — wording carried elsewhere
The following table presents our Condensed Statements of Operations for the periods indicated:
Previous report — wording carried elsewhere
Net Income Attributable to Non-Controlling Interests
Previous report — wording carried elsewhere
The following table presents income from continuing operations of our Electronic Instruments segment for the periods indicated:
Previous report — wording carried elsewhere
The following table presents income from continuing operations of our Merchant Investment segment for the periods indicated:
Previous report — wording carried elsewhere
The following table presents income from continuing operations of our Corporate segment for the periods indicated:
Previous report — wording carried elsewhere
Loss from Continuing Operations Before Income Taxes