8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the

Securities Exchange Act of 1934

Date of report (Date of earliest event reported): November 23, 2010

THE LGL GROUP, INC.
(Exact Name of Registrant as Specified in Charter)
Delaware	1-106	38-1799862
(State or Other Jurisdiction of Incorporation)	(Commission File Number)	(IRS Employer Identification No.)
2525 Shader Road, Orlando, FL		32804
(Address of Principal Executive Offices)		(Zip Code)

Registrant’s Telephone Number, Including Area Code: (407) 298-2000

(Former Name or Former Address, If Changed Since Last Report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 8.01.                      Other Events.

On November 23, 2010, The LGL Group, Inc. (the “Company”) issued a press release discussing announcements made in a letter to stockholders, dated November 15, 2010, by the Company’s President and Chief Executive Officer, Greg Anderson.  A copy of the stockholder letter and the press release are attached as Exhibit 99.1 and Exhibit 99.2 hereto, respectively, and are incorporated herein by reference.

Item 9.01.                      Financial Statements and Exhibits.

(d)           Exhibits

Exhibit No.	Description
99.1 99.2	Stockholder letter, dated November 15, 2010. Press release dated November 23, 2010.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

November 23, 2010	THE LGL GROUP, INC.
	By:	/s/ R. LaDuane Clifton
		Name:	R. LaDuane Clifton
		Title:	Chief Accounting Officer

EXHIBIT INDEX

Exhibit No.	Description
99.1 99.2	Stockholder letter, dated November 15, 2010. Press release dated November 23, 2010.

EX-99.1

[The LGL Group, Inc. Header]

November 15, 2010

To our Stockholders:

This is my first letter to you.  I am excited about the turnaround that has taken place at LGL.  I am equally excited about the future and what it may hold.   The global recession that began in 2008 and continued throughout 2009 had a major impact on our financial performance, but it also brought with it the urgency for change.  During the first half of 2009, our strategy and focus was to drive structural cost out of the enterprise without impairing the Company’s ability to serve customers, to develop new products, and to remain opportunistic to grow revenues.  Sequential quarters of revenue growth, solid earnings, and record backlogs reported during Q4 2009 and the first half of 2010 are evidence that our strategies and efforts were sound.

As we finish 2010 and look ahead toward 2011, our customer and technology positions remain strong, the Telecommunications Infrastructure and MISA (Military-Instrumentation-Space-Avionics) Communications market segments that we service are forecasting growth, and LGL will begin 2011 with a revitalized outlook and a significantly improved balance sheet.

FY 2009 and H1 2010 in Review

Q4 2008 saw a sharp decline in new orders, both for the Company and the economy in general, signaling a difficult recessionary period ahead.  With the rapid slowdown of new orders, the Company took immediate actions to accelerate its efforts to reduce structural costs through right-sizing, realigning, and streamlining its operations.  The Company’s goal was to reposition itself to better serve customers while significantly reducing its overall cost base.  In addition to the structural and operational changes, a complete changeover in senior management also took place in 2009.  In February, the Board of Directors brought in Hans Wunderl, who became our interim Chief Operating Officer, to oversee the process of setting the Company back on the path to profitability.  My appointment to C hief Executive Officer followed in July 2009, and then we completed the senior management changes by bringing on a new principal financial officer, LaDuane Clifton, in August 2009.

While it can be a difficult decision to eliminate jobs and cut costs, it was essential to make those changes to survive the recession.  While revenues for FY 2009 decreased to approximately $31,300,000 and gross profits decreased to $7,400,000, working capital also reached a low of approximately $5,400,000 at the end of Q4 2009.   Our efforts resulted in a reduction of more than $4,000,000 in structural costs.

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The beginning of the turnaround in the Company’s performance became apparent in Q4 2009 as we began to realize significant sequential improvement in our business fundamentals.  Revenue began to grow again, reaching $9,200,000 and $10,700,000 for Q4 2009 and Q1 2010, respectively.  Q2 2010 revenues reached a quarterly record of $12,500,000.  Over the same three quarters, we also began seeing the gains from the operating efficiencies that we had worked to put in place, realizing improvements in gross margins to 31.6% and 34.1% for Q4 2009 and Q1 2010, respectively, and then another quarterly record for Q2 2010, with gross margins of 36.2%.  Structural costs reached an all-time low in Q4 2009 and have been maintained at that level throughout the first half of 2010.

As a result of the hard work and our continuing focus on operational improvement, the Company has returned to profitability, reporting net income of $330,000, $1,070,000 and $2,180,000 for Q4 2009, Q1 2010 and Q2 2010, respectively.  Earnings per share for the same three quarters were $0.15, $0.48, and $0.97, respectively.  The improved earnings also had a positive impact on the Company’s balance sheet, as working capital grew to approximately $8,800,000 at the end of Q2 2010.  In addition, the Company’s order backlog, which represents firm orders that are expected to be shipped within the next twelve months, reached a record level of approximately $14,400,000 at the end of Q2 2010.

Launching New Technology

Sustained organic growth can only be achieved by developing new products for our customers.  Our strategy includes continuing to invest in highly-engineered products.    We have focused our research and development efforts on technologies that increase the complexity of our product portfolio and move it further up in the value chain, which is a key element in growing stockholder value.

During the second half of FY 2009, our investments in design engineering led to an expansion of our cavity filter product offerings for the MISA market segment and were well received.  Specifically, we won new contracts with end-use application in the Homeland Security and Public Safety sectors.  These contracts made significant contributions to revenue during the first half of 2010.  Repeat orders for this technology have already been received.

We enjoyed benefits from significant design engineering investment in our timing device product lines as we successfully launched production of an ultra-precise device known as a double-oven oscillator.  There are applications for this technology in both the Telecom and MISA market segments, and this technology is an essential building block in our efforts to become a module and subsystem supplier.   Specific contracts were won during the second half of 2009 with end-use applications within military systems in support of anti-terror efforts.  These contracts also had a significant impact on revenues during the first half of 2010, and additional orders are anticipated.

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Looking ahead, design efforts are continuing on a number of fronts, including development of small format ASIC-based timing devices for very precise timing applications.  These cutting edge components will serve as a building block for a host of new products.  This investment of design engineering resources should bring new product opportunities for both the Telecom and MISA market segments.

Improving Flexibility

As our markets recover and investments in new technology are required, a careful eye toward managing costs across the enterprise is essential.  Our management team remains vigilant in seeking methods of driving waste and process inefficiency out of our operations and our supply chain.  I am personally committed to reducing structural costs while improving our overall operating flexibility.  To mitigate risk, we must build a flexible organization that can maintain profitability even through unexpected down cycles.  In addition, we are focusing our capital investments on developing state of the art design engineering expertise and reinforcing a sales force with strong customer positions that can be further leveraged.

Improving our financial flexibility is another key element to sustaining solid business performance.  Significant progress has been made in overall working capital levels largely by posting sequential quarters with earnings, generating cash from operations, and reducing the Company’s debt.   It is our intent to continue to improve our financial flexibility seeking to simplify the requirements of our remaining credit facilities, and by raising equity capital.

Looking Forward H2 2010 and FY 2011

The Company entered into 2010 with a record backlog, a very strong customer base, growing markets, and a significantly improved operating cost base.  To date, we have reaped the promise of these indicators in the first of half of 2010.  We expect to finish FY 2010 overall much stronger than the prior few years and enter FY 2011 positioned for further success.  For our customers, our stockholders, and our talented employees, it is critical that we deliver consistent financial performance.  Credibility is only earned by demonstration, and not through words alone.

As we look ahead, we have defined four pillars for growth, which include:  (i) organic investment into our core components business, which represents the potential to increase supply capacities; (ii) joint venture investments that will allow us to gain access to intellectual property or new technology that will spur further growth higher into the product value chain, or to diversify and expand our supply capacity; (iii) merger and acquisition opportunities involving companies that are engineering-centric and produce custom order products at a low volume, and therefore provide synergy in combination with our core business; and (iv) exploration of greenfield opportunities that have the capability to bring new markets, new customers and diverse new technologies to the Company.

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The strengths of our operating platform continue to be our ability to engineer precision devices, our ability to service blue chip OEM customers as preferred suppliers by providing them a wide offering of frequency control products, our military-cleared supply chain that supports both hardware and software, and a worldwide operating base for sales, engineering, and manufacturing.

We are pleased that the improvement in business fundamentals has been recognized by the investment community.  It is management’s intent to continue to create stockholder value by growing our operating platform, aligning senior management incentives with longer term value creation, and by broadening the existing stockholder base.  All of these items are an active part of our strategy for the Company.

2010 Annual Meeting

Please accept my personal invitation to attend our 2010 Annual Meeting in person on December 15, 2010, in New York, New York.  I look forward to the opportunity of seeing many of you and sharing further insight on our strategies for growth.

As always, I want to thank all of our employees, associates and leaders for staying focused through a very difficult, but exciting time.  Their commitment to excellence and their passion for delivering quality customer service have been a fundamental part of the Company’s turnaround.

I want to thank our loyal customers for their patronage and feedback, both good and bad; constructive feedback provides us the opportunity to improve.

Finally, I thank all of you, our stockholders for continuing to support us with your investments.  Our goal is to create stockholder value through strategic growth and sustained gains in operating performance.

Respectfully,

/s/ Gregory P. Anderson

Gregory P. Anderson

President and Chief Executive Officer

                                                                        - Page 4 -

EX-99.2

Contacts: LaDuane Clifton, The LGL Group, Inc.:                                                                                                (407) 298-2000

                 Email: lclifton@lglgroup.com

                 Victor Emmanuel, VJE Consultants:                                                                                                        (914) 305-5198

LGL Signals Positive Outlook for 2011 in Stockholder Letter

ORLANDO, FL, November 23, 2010 – The LGL Group, Inc. (NYSE Amex: LGL) (the “Company”) has told stockholders that it enters 2011 with strong customer and technology positions, and its key market segments, which include Telecommunications Infrastructure and Military, Instrumentation, Space and Avionics (“MISA”) Communications, are forecasting growth.  In addition, the Company noted that its balance sheet is “significantly improved.”

The Company had recently announced its results for the three and nine months ended September 30, 2010.  The Company reported earnings of $0.88 per share and revenues of approximately $12,397,000 for the three months ended September 30, 2010, compared to loss per share of ($0.43) and revenues of approximately $7,321,000 for the comparable period in 2009.  For the nine months ended September 30, 2010, the Company reported earnings of $2.32 per share and revenues of approximately $35,633,000, compared to loss per share of ($1.32) and revenues of approximately $22,099,000 for the comparable period in 2009.  Due to the utilization of the Company’s U.S. net operating losses, and the corresponding release of the valuation allowance against its otherwise recognizable U.S. net deferred tax assets, the Company ’s estimated consolidated annual effective tax rate as of September 30, 2010 was 3.9%.

The outlook for 2011 was announced in a letter to stockholders dated November 15, 2010, by the Company’s President and Chief Executive Officer, Greg Anderson, who also defined a framework for the Company’s growth strategy that Mr. Anderson called the “four pillars of growth.”  These included the following:

·   Organic investment:  Continued investment in the Company’s core components business, including new product development and efforts to increase and diversify supply capacity;

·   Joint venture:  Investments to gain access to intellectual property or new technologies that move the Company higher in the “product value chain”;

·   Acquisitions:  Seeking opportunities that provide synergy with our core business or further expand our core competencies in connection with our strategic vision; and

·   Greenfield investment:  Exploration of true greenfield opportunities that can bring new markets, new customers and diverse new technologies to the Company

/2

In his letter, Mr. Anderson said, “We are pleased that the improvement in our business fundamentals has been recognized by the investment community.  It is management’s intent to continue to create stockholder value by growing our operating platform, aligning senior management incentives with long-term value creation, and by broadening the existing stockholder base.”

Mr. Anderson also highlighted the Company’s current new product design efforts, specifically mentioning development of small format ASIC-based timing devices for very precise timing applications.  He noted that such devices will serve as a building block for many new products for both the Telecom and MISA market segments.

About The LGL Group, Inc.

The LGL Group, Inc., through its wholly-owned subsidiary MtronPTI, manufactures and markets highly engineered electronic components used to control the frequency or timing of signals in electronic circuits.  These devices are used extensively in infrastructure equipment for the telecommunications and network equipment industries, as well as in electronic systems for military applications, avionics, earth-orbiting satellites, medical devices, instrumentation, industrial devices and global positioning systems. The Company has operations in Orlando, Florida, Yankton, South Dakota and Noida, India.  MtronPTI also has sales offices in Hong Kong and Shanghai, China.

For more information on the Company and its products and services, contact R. LaDuane Clifton, Chief Accounting Officer, The LGL Group, Inc., 2525 Shader Rd., Orlando, Florida 32804, (407) 298-2000, or visit the Company’s Web site: www.lglgroup.com.

Caution Concerning Forward Looking Statements

This document includes certain “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are based on management’s current expectations and are subject to uncertainty and changes in circumstances. Actual results may differ materially from these expectations due to changes in global political, economic, business, competitive, market and regulatory factors. More detailed information about those factors is contained in the Company’s filings with the U.S. Securities and Exchange Commission.