ORLANDO, Fla., Aug. 20, 2009 (GLOBE NEWSWIRE) -- The LGL Group, Inc. (NYSE Amex: LGL) (the "Company"), today announced results for the quarter ended June 30, 2009. LGL is the holding company for MtronPTI which specializes in the development and sale of highly engineered, custom made products for advanced frequency control applications. Primary markets include military, avionics, aerospace, telecommunications and test & measurement sectors.
Total revenues for the six months ended June 30, 2009 were $14,778,000, a decrease of 25.9% from the comparable period in 2008. The decrease is due primarily to a general economic slowdown and a corresponding decrease in demand for the electronic systems in which our products are used. The decrease in sales was primarily in our foreign markets, with a decline of $3,902,000 in foreign sales, and a decrease of $1,253,000 in domestic sales compared with the same period in 2008.
The operating loss in the second quarter of 2009 was $1,800,000 compared to a loss of $850,000 for the comparable period in 2008, a deterioration of $950,000. Net loss for the first six months of 2009 was $1,893,000 compared to a net loss of $1,163,000 for the same period in 2008. The loss was primarily driven by the reduction in revenue and by a reduction in gross margin percentage of 5.4% in the second quarter of 2009. The reduction in gross margin percentage is primarily the result of significant decreases in total revenue and volume compared to the previous year, and a change in revenue mix to products with lower gross margin.
The weakening in gross margin percentage and the reduction in sales were partially offset by a decrease in engineering, selling and administrative expenses of $1,199,000 in the first half of 2009 compared to the same period in 2008, attributable to a reduction in head count and in professional fees, which were the result, in part, of the Company's continuing efforts to resize the operations and realign its cost structure.
Company President and CEO, Greg Anderson, commented, "Our business continues to feel the effects of the very weak macro-economic environment. In particular our revenues have declined dramatically from our key customers in the telecommunications sector. Despite the revenue shortfall, we have made good progress in reducing the Company's structural costs as we announced earlier this year. We will continue to bring strong focus on cost management and securing our customer relationships."
Mr. Anderson also noted the Company's announcement on August 17 that it had introduced a proprietary filter system for the multi-billion dollar space satellite industry. "This system adds to our expanding proprietary product portfolio. We have also secured over the past several months active projects with 12 industry leaders in the $10 billion satellite manufacturing market. This is an important new area of business for the Company," Mr. Anderson said.
"We are continuing to drive forward the changes for improved operational efficiency and increased shareholder value that were announced earlier this year," added Hans Wunderl, the Company's recently appointed COO. "We experienced significant transition costs with our resizing during the quarter and are confident that the impact of these changes will improve our margins going forward. Our management team is focused on continuing to channel our resources on our core customer base and growth market opportunities while aligning our cost structure towards profitability. We are maintaining our core engineering resources to allow us to rapidly respond to new market opportunities."
The Company will host an investor conference call to discuss its results for the fiscal quarter ended June 30, 2009, earnings report and other recent Company announcements on Thursday, August 27, 2009 at 3:00 p.m. Eastern Time. The LGL Group CEO Greg Anderson and CFO Harold Castle will host the audio event.
Participants can access the conference call at (888) 942-8686 for domestic callers and (303) 928-3288 for international callers. The conference ID is 1757058.
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. They are also used 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 a sales office in Hong Kong, China.
For more information on the Company and its products and services, contact Harold D. Castle, Chief Financial 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 LGL Group's filings with the Securities and Exchange Commission.