LGL Group Inc (LGL) 2021 Q4 法說會逐字稿

Good day, and welcome to the LGL Group Inc. Annual Earnings Conference Call. Today's conference is being recorded. At this time, I would like to turn the conference over to Mike Ferrantino. Please go ahead, sir.

大家好，歡迎參加LGL集團公司年度財報電話會議。今天的會議正在錄製中。現在，我想將會議交給Mike Ferrantino。先生，請開始。

Thank you. Good morning, and thank you for attending today's call covering our financial results for the 3 months and 12 months ended December 31, 2021. Hopefully, you have had a chance to review our 10-K, which was released premarket opening yesterday. If not, it is available on our website. James Tivy, our CFO, will review our financial results at this time. James?

謝謝。早安，感謝您參加今天的電話會議，討論我們截至2021年12月31日的三個月和一年的財務表現。希望您有機會查看我們昨天開盤前發布的10-K報表。如果沒有，您可以在我們的網站上查看。我們的財務長James Tivy將在此時回顧我們的財務表現。 James？

Yes. Good morning, everyone, and thanks for joining our full year 2021 earnings call. Please note that this call will be recorded, and we anticipate making the recording available on our website sometime after the call.

是的。大家早安，感謝您參加我們2021年全年財報電話會議。請注意，本次電話會議將被錄音，我們預計在會議結束後的某個時間將錄音發佈到我們的網站上。

We have issued our 10-K yesterday before the market opened, reporting results for our fourth fiscal quarter and full year of 2021. Before getting underway, we are required to advise you and all participants should note, that the following discussion should be taken in conjunction with the most recent financial statements and notes thereto contained within our 2021, 10-K, which has been filed with the SEC.

我們昨天在市場開盤前發布了 10-K 報表，報告了我們 2021 年第四財季和全年的業績。在開始之前，我們必須提醒您和所有參與者註意，以下討論應結合我們已向美國證券交易委員會 (SEC) 提交的 2021 年 10-K 報表中包含的最新財務報表及其附註進行。

This discussion may contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Act -- sorry, of the Securities and Exchange Act of 1934. These forward-looking statements involve known and unknown risks and uncertainties, which are detailed in our filings with the SEC.

本討論可能包含《1933 年證券法》第 27A 條和《證券法》第 21E 條（抱歉，是《1934 年證券交易法》）所定義的前瞻性陳述。這些前瞻性陳述涉及已知和未知的風險和不確定性，這些在我們向美國證券交易委員會提交的文件中進行了詳細說明。

Although the company believes that its forward-looking statements are based upon reasonable assumptions regarding its business and future market conditions, there can be no assurances that the company's actual results will not differ materially from any results expressed or implied by the company's forward-looking statements. The company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

儘管本公司認為其前瞻性陳述是基於對其業務和未來市場狀況的合理假設，但無法保證公司的實際業績不會與公司前瞻性陳述中明示或暗示的任何業績有重大差異。本公司不承擔因新資訊、未來事件或其他原因而公開更新或修改任何前瞻性陳述的義務。

Any forward-looking statements are not guarantees of future performance. Let me now summarize for you where LGL stands for the fourth quarter and for the full year of 2021. Our fourth quarter revenues of $7.2 million was $0.2 million or 2.6% below 2020 revenues of $7.4 million.

任何前瞻性陳述均不保證未來績效。現在，我來為您總結LGL在2021年第四季和全年的業績。我們第四季的營收為720萬美元，較2020年的740萬美元下降了20萬美元，降幅為2.6%。

Operating loss for the quarter was $596,000 compared to $138,000 in the fourth quarter of 2020. Current period inflationary pressures, lower shipments and the $200,000 of MtronPTI spin-off costs reduced fourth quarter profitability.

本季營業虧損為 596,000 美元，而 2020 年第四季為 138,000 美元。本期通膨壓力、出貨量下降以及 20 萬美元的 MtronPTI 分拆成本降低了第四季的獲利能力。

Order backlog was $29.8 million versus $19.8 million at the beginning of the year and $21.8 million as of the third quarter of 2021. This improvement was from the recovering avionics market and strong defense orders, including a 2021 fourth quarter order for $6.3 million related to a major missile defense program most of which is expected to ship subsequent to 2022.

訂單積壓為 2,980 萬美元，而年初為 1,980 萬美元，截至 2021 年第三季為 2,180 萬美元。這項改善得益於航空電子市場的復甦和強勁的國防訂單，其中包括 2021 年第四季度與一項重大導彈防禦計劃相關的 630 萬美元訂單，其中大部分預計將在 2022 年之後發貨。

For the full year, our revenues were $28.1 million versus $31.2 million for 2020, which was $3.1 million or 9.7% below the prior year. Our lower annual revenue reflects pre-COVID conditions during the first quarter of 2020, and the significant decline in shipments to the avionics market.

全年營收為2,810萬美元，而2020年為3,120萬美元，較上年減少310萬美元，降幅達9.7%。我們較低的年度收入反映了2020年第一季新冠疫情爆發前的情況，以及航空電子市場出貨量的大幅下降。

Gross margins improved to 35.8% compared to 35.1% last year. For the 2021 year, the company reported a $0.8 million operating loss. Excluding the $1.3 million noncash charitable donation of IronNet common stock, operating income was $0.5 million compared to $1.4 million for 2020.

毛利率從去年的35.1%提升至35.8%。 2021年，公司報告營運虧損80萬美元。若不計IronNet普通股130萬美元的非現金慈善捐贈，營運利潤為50萬美元，而2020年為140萬美元。

Lower sales and inflationary pressures and the spin-off costs offset the benefit from cost reductions, including the elimination of certain previously required costs to preserve manufacturing capabilities in response to the COVID-19 impacts on our business and there were also benefits from a favorable product mix.

較低的銷售和通膨壓力以及分拆成本抵消了成本削減帶來的好處，包括為應對 COVID-19 對我們業務的影響而取消某些先前為保持製造能力所需的成本，以及有利的產品組合帶來的好處。

Net income was $14.6 million compared to $1 million last year, largely as a result of our SPAC-related investment. Diluted earnings per share was $2.74 compared to $0.19 per share in 2020. The significant increase reflects the favorable results of the company's SPAC-related investment triggered by the IronNet business combination.

淨利潤為1460萬美元，而去年同期為100萬美元，這主要得益於我們與SPAC相關的投資。稀釋每股收益為2.74美元，而2020年每股收益為0.19美元。這一大幅成長反映了公司因IronNet業務合併而引發的SPAC相關投資的良好表現。

Our year-end 2021 net cash position, including marketable securities, was $45.8 million, which is more than $8.50 a share.

我們 2021 年底的淨現金狀況（包括有價證券）為 4,580 萬美元，每股超過 8.50 美元。

With that, I'll now turn the call back over to Mike Ferrantino.

說完這些，我現在將電話轉回給麥克費蘭蒂諾。

Thank you, James. As you have heard, we have ended the year with a strong and growing backlog, margins are improving and the balance sheet is strong. I am proud of the entire LGL's team's success and dedication while facing the challenge of inflation, supply chain disruption and workforce headwinds.

謝謝，詹姆斯。正如你所聽到的，我們以強勁且不斷增長的訂單量結束了這一財年，利潤率正在提高，資產負債表也表現強勁。我為整個LGL團隊在面對通貨膨脹、供應鏈中斷和勞動市場逆境的挑戰時所取得的成功和奉獻感到自豪。

We have released several new products in 2021 in both our spectrum control and frequency control product areas. These products extend our reach into the military and aerospace market and have contributed to our backlog growth.

2021年，我們在頻譜控制和頻率控制產品領域發布了多款新產品。這些產品拓展了我們在軍事和航空航太市場的影響力，並促進了訂單量的成長。

The MtronPTI spin-off plan is progressing with solicitation of shareholder approval targeted for the second quarter of this year. We believe that the spin-off would enable shareholders to more clearly evaluate the performance and future potential of each entity on a stand-alone basis, while allowing each to pursue its own distinct strategic plans and growth opportunities.

MtronPTI 的分拆計畫正在推進中，預計今年第二季徵求股東批准。我們相信，分拆將使股東能夠更清楚地評估各實體的獨立績效和未來潛力，同時讓各實體追求其獨特的策略計畫和成長機會。

I'll now open the floor to questions. Operator, please open the call to any questions.

現在開始提問。接線員，請接聽電話，回答任何問題。

(Operator Instructions) And our first question will come from Anja Soderstrom with Sidoti.

（操作員指示）我們的第一個問題來自 Sidoti 的 Anja Soderstrom。

So first, the backlog, a very nice growth there. Can you quantify how much that is related to new business versus how much may be related to supply chain challenges?

首先，訂單積壓成長動能良好。您能否量化一下，這其中有多少是與新業務有關，又有多少可能與供應鏈挑戰有關？

Sure. In terms of new business, roughly 10% of that is related to new products that have been introduced in the past 12 to 18 months or so. There is some amount related to advanced orders from supply chain-related issues, but it's relatively small.

當然。就新業務而言，大約10%與過去12到18個月左右推出的新產品有關。還有一些與供應鏈相關問題帶來的預購訂單有關，但數量相對較少。

Okay. And are there any new customers in there or is it mainly expansion with current customers?

好的。那裡有新客戶嗎？還是主要是擴大現有客戶？

There is some new customer penetration. However, a large part of that backlog is with existing customers.

有一些新客戶正在湧入。然而，很大一部分積壓訂單來自現有客戶。

Okay. And you also alluded to the margin for the fourth quarter was due to raw material, but you've been able to pass some of that on. Is there room for more of that to be passed on? And what is the lag there in terms of being able to pass that on to our customers, if you can?

好的。您也提到第四季度的利潤率是由於原材料成本造成的，但您已經將部分成本轉嫁給了客戶。還有沒有更多轉嫁的空間？如果可以的話，將成本轉嫁給客戶方面會存在哪些延遲？

Sure. There is some room to pass on increases as our costs or supply costs go up. The lag generally is tied to the lead time on the orders, which vary from -- really from 8 to 12 weeks to slightly beyond that.

當然。隨著我們的成本或供應成本上漲，我們有一定的轉嫁空間。滯後通常與訂單的交付週期有關，交付週期從8到12週不等，甚至略長。

Okay. And you're also talking about the recovery in the avionics market, you're seeing benefits from that. Where do you think we are in the innings of that?

好的。您也談到了航空電子市場的復甦，您看到了其中的好處。您認為我們目前處於哪個階段？

I think the -- we're in the early stages of that recovery. There's still a long way to go.

我認為——我們正處於復甦的早期階段。還有很長的路要走。

Okay. So there's more potential for you to increase that in the coming quarters?

好的。那麼在接下來的幾個季度裡，你們還有更大的潛力來提高這個數字嗎？

That is correct.

沒錯。

Okay. And is anything else you can talk through in terms of how you are combating the inflationary pressures and sort of labor shortages, if you are affected by that?

好的。如果您也受到通膨壓力和勞動力短缺的影響，您還能談談如何應對這些壓力嗎？

So in terms of the inflationary pressures, we are constantly looking at our sources and working with them as well as identifying additional sources. On the labor front, we've done a pretty good job of maintaining our workforce, and we will continue to do that.

因此，就通膨壓力而言，我們一直在關注相關資源，並與他們合作，同時尋找其他資源。在勞動力方面，我們在維護勞動力方面做得相當不錯，我們將繼續這樣做。

Okay. And then very last, in terms of the spin-off of the MtronPTI business, you'll have the shareholder vote in the second quarter, right?

好的。最後，關於 MtronPTI 業務的分拆，您將在第二季進行股東投票，對嗎？

That's correct. That is what we're targeting.

沒錯。這正是我們的目標。

And what's the time frame then for term -- in terms of actually going through with the spin-off? And I would assume you set up a management team already for that to be -- to manage that entity?

那麼，就實際完成分拆而言，具體時間框架是怎麼樣的呢？我猜你已經組了管理團隊來管理這個實體了？

Yes, that is correct. The management team has been identified for that. And as far as the timing of that, there is a process that we'll go through, but we would expect that to be completed in the third quarter.

是的，沒錯。管理團隊已經確定。至於具體時間，我們需要一個流程，預計在第三季完成。

Okay. And the management team will be sort of presented before the vote or is that something that's going to be revealed after or how does this work?

好的。管理團隊會在投票前介紹嗎？還是投票後才會公佈？或是具體流程是怎麼樣的？

It would be within the proxy.

它將位於代理內。

Within the proxy. Okay. That was all from me.

在代理內。好的。我說的就這些。

Moving on we'll go to Vishal Mishra with Mishra Capital.

接下來我們來談談 Mishra Capital 的 Vishal Mishra。

Mike, James, just a clarification on the backlog, about $30 million and $6 million from the new order, most of it will be shipped in 2022. So maybe more than $3 million will be -- I'm just trying to wonder what is the backlog for the next 12 months, like convertible into the next 12 month, if there is a number you provide that or you can give us more clarity on that?

麥克、詹姆斯，請澄清一下積壓訂單的情況，大約有 3000 萬美元，新訂單有 600 萬美元，大部分將在 2022 年發貨。所以可能會超過 300 萬美元——我只是想知道未來 12 個月的積壓訂單是多少，例如可以轉換為下 12 個月的訂單，您是否可以提供一個數字，或者您可以給我們更清楚地說明這一點？

Yes. I think what we've seen is, obviously, there's a big $6 million order, which we don't expect to ship until 2022, until after 2022. It's really just been avionics is coming back, and we're having pretty good success with our existing customers.

是的。我想我們看到的是，顯然有一筆600萬美元的大訂單，我們預計要到2022年，甚至2022年之後才能發貨。實際上，航空電子設備正在復甦，我們與現有客戶的關係也相當不錯。

(Operator Instructions) Moving on. We'll go to [Greg Greenberg], investor.

(操作員指示) 接下來，我們來談談投資者格雷格·格林伯格。

Wondering if you can give us a little bit more color on how we should think of LGL Group as the RemainCo. Should we think about it that it's going to be investing in public companies or more like a SPAC looking for a merger partner to bring the management and cash to it?

能否請您進一步解釋一下，我們該如何看待LGL集團作為「留守公司」的定位？我們應該把它看作是投資上市公司，還是更像一家尋求合併夥伴、為其帶來管理和資金的SPAC？

So post the spin-off MtronPTI, LGL will still have its operating entity PTF, but it will also be focusing on profitable growth through acquisition.

因此，在分拆 MtronPTI 後，LGL 仍將擁有其營運實體 PTF，但它也將專注於透過收購實現獲利成長。

Okay. And then on the spin, is there any outside valuation or outside investor that may help us have a reference for what that business may be worth?

好的。那麼，有沒有外部估值或外部投資者可以幫助我們了解該業務的價值？

We have not conducted an outside evaluation at this point.

目前我們尚未進行外部評估。

Okay. And then finally, can you just go over how the warrants will be affected, assuming that the spin occurs?

好的。最後，您能否解釋一下，假設發生旋轉，認股權證會受到怎樣的影響？

Yes, Greg, just on the warrants, there's a formula, and it was disclosed in the most recent preproxy, preliminary proxy, we sent out. It's approximately related to the percentage of each of the 2 companies subsequent to going -- subsequent to the spin-off measuring their prices over the -- over a short period.

是的，格雷格，就認股權證而言，有一個公式，在我們最近發出的初步代理委託書中披露過。它大致相當於兩家公司在分拆後（即分拆後）短期內各自持有的股份比例。

So if, for example, the Mtron is 30% of the value of the 2 numbers, the 2 trading companies after the spin, then the prices of the LGL warrants will be reduced by 30%, and the stock price is also adjusted.

所以比如說MTron是2個數字，2個交易公司在分拆之後的價值的30%，那麼LGL認股權證的價格就會降低30%，股價也會進行調整。

(Operator Instructions) And moving on, we'll go to Eddie Reily with EF Hutton.

（操作員指示）接下來，我們將與 EF Hutton 一起去找 Eddie Reily。

I was just wondering if you could maybe unpack maybe the types of companies you're looking at to acquire within the RemainCo after the spin-off?

我只是想知道您是否可以解釋一下在分拆之後您希望在 RemainCo 內收購的公司類型？

I think post-spin, there'll be a wide variety of companies that would fit the criteria that we're looking for. Not really much to say at this time.

我認為分拆之後，會有各種各樣的公司符合我們的標準。目前還不好說。

And next, we'll go to Mark Vanderwel with Vanderwel Family Practice.

接下來，我們請到 Vanderwel Family Practice 的 Mark Vanderwel。

I'm wondering if you could comment on what effect the war on Ukraine is having or you expect might have on your defense business?

我想知道您是否可以評論一下烏克蘭戰爭對您們的國防業務產生了什麼影響，或者您預計會產生什麼影響？

Sure. I think there's a couple of potential effects. Obviously, any increased spending in the defense budgets would be a potential benefit for the company. Also here we are looking at are there opportunities where through some of the sanctions being put on Russia, is there opportunities created through that. We're evaluating that now.

當然。我認為有幾個潛在的影響。顯然，國防預算的任何增加都會為公司帶來潛在的好處。此外，我們也正在關注對俄羅斯實施制裁是否會創造新的機會。我們現在正在評估這一點。

Sanctions being put on them would actually benefit you?

對他們實施制裁實際上會為你們帶來好處嗎？

Potentially, there is supply that might come out of Russia that would be harder for certain countries to acquire that we might be able to capitalize on.

俄羅斯可能會提供某些國家難以取得的供應，而我們或許可以利用這一點。

Never would have anticipated that.

從來沒有預料到這一點。

And gentlemen, there are no further questions in the queue at this time, I'd like to turn it back to you for any additional or closing comments.

先生們，現在沒有其他問題了，我想把時間交還給你們，以便你們做出任何補充或結束語。

Sure. Thank you. Well, if there are no more questions, this concludes our call. I would again like to thank you for joining our stockholder -- for joining and our stockholders for their continued support of the company. Have a great day.

當然，謝謝。好了，如果沒有其他問題，我們的電話會議就到此結束。我再次感謝各位股東的參與，也感謝各位股東對公司的持續支持。祝大家有美好的一天。

Thank you. And that does conclude today's call. We'd like to thank everyone for their participation. You may now disconnect.

謝謝大家。今天的電話會議到此結束。感謝大家的參與。現在可以掛斷電話了。