UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of report (Date of earliest event reported):
|
THE |
||
|
(Exact Name of Registrant as Specified in Charter) |
||
|
|
|
|
|
|
|
|
|
(State or Other Jurisdiction |
(Commission |
(IRS Employer |
|
|
|
|
|
|
|
|
|
(Address of Principal Executive Offices) |
(Zip Code) |
|
Registrant’s Telephone Number, Including Area Code: (
|
(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:
|
|
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)) |
Securities registered pursuant to Section 12(b) of the Act:
|
Title of each class |
|
Trading Symbol(s) |
|
Name of each exchange on which registered |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 9.01.Financial Statements and Exhibits.
(b) Pro Forma Financial Information
On August 3, 2022, The Board of Directors of The LGL Group, Inc. (the “Company”) approved the spin-off of the Mtron business into an independent, publicly traded company (the “Spin-Off”) by means of a distribution of 100% of the outstanding common stock of M-tron Industries, Inc. (“Mtron”), on a pro rata basis to the Company’s existing shareholders on the record date of September 30, 2022. The Spin-Off was completed on October 7, 2022. Following the Spin-Off, the Company retains no ownership interest in Mtron.
The unaudited pro forma consolidated statements of income (loss) of the Company for the six months ended June 30, 2022, and for the year ended December 31, 2021, and the unaudited pro forma consolidated balance sheet of the Company as of December 31, 2021, which give effect to the Spin-Off, are filed as Exhibit 99.1 to this Current Report on Form 8-K.
(d)Exhibits
|
Exhibit No. |
Description |
|
99.1 |
|
|
104 |
Cover Page Interactive Data File (embedded within the Inline XBRL document). |
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.
|
October 14, 2022 |
THE LGL GROUP, INC. |
||
|
|
|
||
|
|
|
||
|
|
By: |
/s/ James W. Tivy |
|
|
|
|
Name: |
James W. Tivy |
|
|
|
Title: |
Chief Accounting Officer |
Exhibit 99.1
THE LGL GROUP, INC.
UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL INFORMATION FOR THE COMPANY
On August 3, 2022, the Board of Directors of The LGL Group, Inc. (the “Company”) approved the spin-off of the Mtron business into an independent, publicly traded company (the “Spin-Off”) by means of a distribution of 100% of the outstanding common stock of M-tron Industries, Inc. (“Mtron”), on a pro rata basis, to the Company’s existing shareholders. The Company effected this through an intended tax-free spin-off of Mtron to LGL’s shareholders. The distribution of Mtron shares was completed at 12:01 am on October 7, 2022, with LGL shareholders receiving one-half share of Mtron common stock for every share of LGL common stock held at the close of business on the record date of September 30, 2022 (the “Distribution”). Mtron common stock trades on the NYSE American under the symbol “MPTI.” Following the Spin-Off, the Company retains no ownership interest in Mtron.
The following unaudited pro forma consolidated statements of income (loss) for the six months ended June 30, 2022 and the fiscal year ended December 31, 2021 reflect the results of operations as if the Distribution had occurred on January 1, 2021. The unaudited pro forma consolidated balance sheet as of June 30, 2022 assumes that the Distribution occurred as of June 30, 2022. The unaudited pro forma consolidated financial information should be read together with the Company’s historical consolidated financial statements and accompanying notes and Management’s Discussion and Analysis of Financial Condition and Results of Operations contained in its annual report on Form 10-K for the fiscal year ended December 31, 2021, and in its quarterly report on Form 10-Q for the six months ended June 30, 2022.
The unaudited pro forma consolidated financial statements are for illustrative and informational purposes only and are not intended to represent what the Company’s results of operations or financial position would have been had the Spin-Off and related transactions occurred on the dates assumed. In addition, the unaudited pro forma consolidated financial statements also should not be considered indicative of the Company’s future results of operations or financial position following the Spin-Off.
The “Historical LGL (as reported)” column in the unaudited pro forma consolidated financial statements reflects the Company’s historical consolidated financial statements for the periods presented and does not reflect any adjustments related to the Spin-Off and related transactions.
The information in the “Discontinued Operations” column in the unaudited pro forma consolidated statements of income (loss) was derived from the Company’s consolidated financial statements and related accounting records for the six months ended June 30, 2022 and the fiscal year ended December 31, 2021, and reflects the operating results of Mtron. The Company has historically provided many corporate functions on Mtron’s behalf, including executive services, tax, accounting, public and investor relations, general management, and has shared information technology systems, corporate governance activities, and centrally managed employee benefit arrangements. The expense allocation is based on the allocation methodology used to prepare the carve-out financial statements of Mtron included in the Information Statement included as Exhibit 99.1 to Mtron’s Registration Statement on Form 10, as amended on August 19, 2022 (the “Information Statement”) and is considered to be a reasonable estimate of the costs of services provided to Mtron by the Company during the periods presented. However, the allocation may not reflect the Company’s actual expenses following the Spin-Off or the actual costs to be incurred by Mtron following the Spin-Off, which may be impacted by multiple factors, including the organizational structure and strategic direction of these companies in the future. The information in the “Discontinued Operations” column in the unaudited pro forma consolidated balance sheet was derived from the Company’s consolidated financial statements and the related accounting records as of June 30, 2022, adjusted to include the assets and liabilities of Mtron pursuant to the Amended Separation and Distribution agreement. Discontinued Operations does not reflect what Mtron’s results of operations would have been on a stand-alone basis and are not necessarily indicative of future results of operations. Beginning in the fourth quarter of fiscal 2022, Mtron’s historical financial results for periods prior to the Distribution will be reflected in the Company’s consolidated financial statements as discontinued operations.
The information in the “Pro Forma Adjustments” column in the unaudited pro forma consolidated financial statements was based on available information and assumptions that the Company’s management believes are reasonable, that reflect the impacts of events directly attributable to the Spin-Off and related transactions that are factually supportable, and for purposes of the consolidated statements of income (loss), are not expected to have a continuing impact on the Company. The pro forma adjustments do not reflect future events that may occur after the Spin-Off, including potential selling, general and administrative dis-synergies and the expected charges, the expected realization of any cost savings and other synergies in connection with the Spin-Off.
The “Pro Forma LGL” column is not necessarily indicative of future results nor does it reflect what the Company’s financial position and results of operations would have been as an independent public company during the periods presented.
Costs directly related to the Spin-Off prior to its completion have been and will be borne by the Company. Accordingly, these costs are reflected in the Company’s pro forma statement of operations below, and included within the pro forma adjustments on the income statements.
THE LGL GROUP, INC.
UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF LOSS
SIX MONTHS ENDED JUNE 30, 2022
(in thousands, except per share amounts)
|
|
|
Historical LGL (as reported) |
|
|
Discontinued Operations (A) |
|
|
Pro Forma Adjustments |
|
|
Pro Forma LGL |
|
||||
|
REVENUES |
|
$ |
15,542 |
|
|
$ |
(14,755 |
) |
|
$ |
— |
|
|
$ |
787 |
|
|
Costs and expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Manufacturing cost of sales |
|
|
9,700 |
|
|
|
(9,231 |
) |
|
|
— |
|
|
|
469 |
|
|
Engineering, selling and administrative |
|
|
5,497 |
|
|
|
(4,107 |
) |
|
|
(353 |
) |
(B) |
|
1,037 |
|
|
OPERATING INCOME (LOSS) |
|
|
345 |
|
|
|
(1,417 |
) |
|
|
353 |
|
|
|
(719 |
) |
|
Other income (expense): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest income, net |
|
|
— |
|
|
|
5 |
|
|
|
— |
|
|
|
5 |
|
|
Investment loss |
|
|
(2,328 |
) |
|
|
— |
|
|
|
— |
|
|
|
(2,328 |
) |
|
Other (expense) income, net |
|
|
(24 |
) |
|
|
26 |
|
|
|
— |
|
|
|
2 |
|
|
Total other expense, net |
|
|
(2,352 |
) |
|
|
31 |
|
|
|
— |
|
|
|
(2,321 |
) |
|
LOSS BEFORE INCOME TAXES |
|
|
(2,007 |
) |
|
|
(1,386 |
) |
|
|
353 |
|
|
|
(3,040 |
) |
|
Income tax benefit |
|
|
(378 |
) |
|
|
(281 |
) |
|
|
69 |
|
(C) |
|
(590 |
) |
|
NET LOSS |
|
$ |
(1,629 |
) |
|
$ |
(1,105 |
) |
|
$ |
284 |
|
|
$ |
(2,450 |
) |
|
Basic per share information: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average number of shares used in basic earnings per share calculation |
|
|
5,329,080 |
|
|
|
5,329,080 |
|
|
|
5,329,080 |
|
|
|
5,329,080 |
|
|
Basic net loss per share |
|
$ |
(0.31 |
) |
|
$ |
(0.21 |
) |
|
$ |
0.05 |
|
|
$ |
(0.46 |
) |
|
Diluted per share information: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average number of shares used in diluted earnings per share calculation |
|
|
5,347,583 |
|
|
|
5,347,583 |
|
|
|
5,347,583 |
|
|
|
5,347,583 |
|
|
Diluted net loss per share |
|
$ |
(0.30 |
) |
|
$ |
(0.21 |
) |
|
$ |
0.05 |
|
|
$ |
(0.46 |
) |
THE LGL GROUP, INC.
UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF INCOME
YEAR ENDED DECEMBER 31, 2021
(in thousands, except per share amounts)
|
|
|
Historical LGL (as reported) |
|
|
Discontinued Operations (A) |
|
|
Pro Forma Adjustments |
|
|
Pro Forma LGL |
|
||||
|
REVENUES |
|
$ |
28,140 |
|
|
$ |
(26,694 |
) |
|
$ |
— |
|
|
$ |
1,446 |
|
|
Costs and expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Manufacturing cost of sales |
|
|
18,069 |
|
|
|
(17,358 |
) |
|
|
— |
|
|
|
711 |
|
|
Engineering, selling and administrative |
|
|
10,857 |
|
|
|
(7,222 |
) |
|
|
(201 |
) |
(B) |
|
3,434 |
|
|
OPERATING LOSS |
|
|
(786 |
) |
|
|
(2,114 |
) |
|
|
201 |
|
|
|
(2,699 |
) |
|
Other (expense) income: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense (income), net |
|
|
(11 |
) |
|
|
12 |
|
|
|
— |
|
|
|
1 |
|
|
Gain on equity investment in unconsolidated subsidiary |
|
|
59,453 |
|
|
|
— |
|
|
|
— |
|
|
|
59,453 |
|
|
Realized loss income on marketable securities |
|
|
(16,962 |
) |
|
|
— |
|
|
|
— |
|
|
|
(16,962 |
) |
|
Unrealized loss on marketable securities |
|
|
(22,949 |
) |
|
|
— |
|
|
|
— |
|
|
|
(22,949 |
) |
|
Other income, net |
|
|
11 |
|
|
|
(11 |
) |
|
|
— |
|
|
|
— |
|
|
Total other income, net |
|
|
19,542 |
|
|
|
1 |
|
|
|
— |
|
|
|
19,543 |
|
|
INCOME BEFORE INCOME TAXES |
|
|
18,756 |
|
|
|
(2,113 |
) |
|
|
201 |
|
|
|
16,844 |
|
|
Income tax provision |
|
|
4,118 |
|
|
|
(531 |
) |
|
|
43 |
|
(C) |
|
3,630 |
|
|
NET INCOME |
|
$ |
14,638 |
|
|
$ |
(1,582 |
) |
|
$ |
158 |
|
|
$ |
13,214 |
|
|
Basic per share information: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average number of shares used in basic earnings per share calculation |
|
|
5,275,374 |
|
|
|
5,275,374 |
|
|
|
5,275,374 |
|
|
|
5,275,374 |
|
|
Basic net income per share |
|
$ |
2.77 |
|
|
$ |
(0.30 |
) |
|
$ |
0.03 |
|
|
$ |
2.50 |
|
|
Diluted per share information: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average number of shares used in diluted earnings per share calculation |
|
|
5,334,087 |
|
|
|
5,334,087 |
|
|
|
5,334,087 |
|
|
|
5,334,087 |
|
|
Diluted net income per share |
|
$ |
2.74 |
|
|
$ |
(0.30 |
) |
|
$ |
0.03 |
|
|
$ |
2.48 |
|
THE LGL GROUP, INC.
UNAUDITED PRO FORMA CONSOLIDATED BALANCE SHEET
AS OF JUNE 30, 2022
(in thousands, except par value amounts)
|
|
|
Historical LGL (as reported) |
|
|
Discontinued Operations (A) |
|
|
Pro Forma Adjustments |
|
|
Pro Forma LGL |
|
||||
|
ASSETS |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current Assets: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
22,325 |
|
|
$ |
(1,103 |
) |
|
$ |
103 |
|
(D) |
$ |
21,325 |
|
|
Marketable securities |
|
|
19,177 |
|
|
|
— |
|
|
|
— |
|
|
|
19,177 |
|
|
Accounts receivable, net of allowance of $81 |
|
|
4,711 |
|
|
|
(4,329 |
) |
|
|
— |
|
|
|
382 |
|
|
Inventories, net |
|
|
6,372 |
|
|
|
(6,128 |
) |
|
|
— |
|
|
|
244 |
|
|
Prepaid expenses and other current assets |
|
|
331 |
|
|
|
(213 |
) |
|
|
— |
|
|
|
118 |
|
|
Total Current Assets |
|
|
52,916 |
|
|
|
(11,773 |
) |
|
|
103 |
|
|
|
41,246 |
|
|
Property, Plant and Equipment |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Land |
|
|
536 |
|
|
|
(536 |
) |
|
|
— |
|
|
|
— |
|
|
Buildings and improvements |
|
|
4,877 |
|
|
|
(4,877 |
) |
|
|
— |
|
|
|
— |
|
|
Machinery and equipment |
|
|
19,202 |
|
|
|
(18,563 |
) |
|
|
— |
|
|
|
639 |
|
|
Gross property, plant and equipment |
|
|
24,615 |
|
|
|
(23,976 |
) |
|
|
— |
|
|
|
639 |
|
|
Less: accumulated depreciation |
|
|
(21,150 |
) |
|
|
20,512 |
|
|
|
— |
|
|
|
(638 |
) |
|
Net property, plant and equipment |
|
|
3,465 |
|
|
|
(3,464 |
) |
|
|
— |
|
|
|
1 |
|
|
Right-of-use lease asset |
|
|
332 |
|
|
|
(183 |
) |
|
|
— |
|
|
|
149 |
|
|
Intangible assets, net |
|
|
214 |
|
|
|
(125 |
) |
|
|
— |
|
|
|
89 |
|
|
Deferred income tax asset |
|
|
499 |
|
|
|
(62 |
) |
|
|
— |
|
|
|
437 |
|
|
Other assets |
|
|
20 |
|
|
|
(20 |
) |
|
|
— |
|
|
|
— |
|
|
Total Assets |
|
$ |
57,446 |
|
|
$ |
(15,627 |
) |
|
$ |
103 |
|
|
$ |
41,922 |
|
|
LIABILITIES AND STOCKHOLDERS' EQUITY |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current Liabilities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accounts payable |
|
$ |
1,560 |
|
|
$ |
(1,524 |
) |
|
$ |
— |
|
|
$ |
36 |
|
|
Accrued compensation and commissions expense |
|
|
1,336 |
|
|
|
(1,195 |
) |
|
|
— |
|
|
|
141 |
|
|
Income taxes payable |
|
|
6 |
|
|
|
— |
|
|
|
— |
|
|
|
6 |
|
|
Other accrued expenses and liabilities |
|
|
545 |
|
|
|
— |
|
|
|
— |
|
|
|
545 |
|
|
Total Current Liabilities |
|
|
3,447 |
|
|
|
(2,719 |
) |
|
|
— |
|
|
|
728 |
|
|
Other liabilities |
|
|
632 |
|
|
|
(112 |
) |
|
|
— |
|
|
|
520 |
|
|
Total Liabilities |
|
|
4,079 |
|
|
|
(2,831 |
) |
|
|
— |
|
|
|
1,248 |
|
|
Contingencies (Note O) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stockholders' Equity |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common stock, $0.01 par value - 30,000,000 shares authorized; 5,472,054 common shares issued and 5,334,187 shares outstanding at June 30, 2022 |
|
|
53 |
|
|
|
— |
|
|
|
— |
|
|
|
53 |
|
|
Additional paid-in capital |
|
|
46,070 |
|
|
|
(5,978 |
) |
|
|
— |
|
|
|
40,092 |
|
|
Retained earnings (accumulated deficit) |
|
|
7,824 |
|
|
|
(6,818 |
) |
|
|
103 |
|
(E) |
|
1,109 |
|
|
Treasury stock, 81,584 shares held in treasury at cost at June 30, 2022 |
|
|
(580 |
) |
|
|
— |
|
|
|
— |
|
|
|
(580 |
) |
|
Total Stockholders' Equity |
|
|
53,367 |
|
|
|
(12,796 |
) |
|
|
103 |
|
|
|
40,674 |
|
|
Total Liabilities and Stockholders' Equity |
|
$ |
57,446 |
|
|
$ |
(15,627 |
) |
|
$ |
103 |
|
|
$ |
41,922 |
|
THE LGL GROUP, INC.
NOTES TO UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS
The unaudited pro forma consolidated statements of income (loss) for the six months ended June 30, 2022 and the fiscal year ended December 31, 2021, and the unaudited pro forma consolidated balance sheet as of June 30, 2022 includes the following adjustments:
|
|
(A) |
Reflects the discontinued operations of Mtron, including the associated assets, liabilities, equity and results of operations, that are directly related to the Spin-Off. |
|
|
(B) |
Reflects one-time non-recurring costs related directly to the Spin-Off that were recorded in the historical numbers for LGL. |
|
|
(C) |
Reflects the tax impact of pro forma adjustments. |
|
|
(D) |
Reflects the expected cash distribution from Mtron to the Company in connection with the Spin-Off. Upon completion of the Spin-Off, the Company expects Mtron will have $1.0 million of cash, and the Company expects any excess cash over $1.0 million to be distributed to the Company. |
|
|
(E) |
Reflects the impact to the Company’s shareholders’ equity from the pro forma adjustment described in note (B). |