Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2022 | Mar. 27, 2023 | Oct. 07, 2022 | |
Document Information [Line Items] | |||
Entity Registrant Name | M-tron Industries, Inc. | ||
Entity Central Index Key | 0001902314 | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Current Reporting Status | Yes | ||
Entity Filer Category | Non-accelerated Filer | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Public Float | $ 25,815,984 | ||
Entity Common Stock, Shares Outstanding | 2,726,798 | ||
Document Fiscal Year Focus | 2022 | ||
Document Fiscal Period Focus | FY | ||
Document Type | 10-K | ||
Amendment Flag | false | ||
Document Period End Date | Dec. 31, 2022 | ||
Entity Small Business | true | ||
Entity Emerging Growth Company | true | ||
Entity Ex Transition Period | false | ||
Entity Shell Company | false | ||
Entity File Number | 001-041391 | ||
Entity Tax Identification Number | 46-0457944 | ||
Entity Address, Address Line One | 2525 Shader Road | ||
Entity Address, City or Town | Orlando | ||
Entity Address, State or Province | FL | ||
Entity Address, Postal Zip Code | 32804 | ||
City Area Code | 407 | ||
Local Phone Number | 298-2000 | ||
Entity Incorporation, State or Country Code | DE | ||
Document Annual Report | true | ||
Document Transition Report | false | ||
Entity Interactive Data Current | Yes | ||
ICFR Auditor Attestation Flag | false | ||
Entity Voluntary Filers | No | ||
Auditor Firm ID | 127 | ||
Auditor Name | PKF O’Connor Davies, LLP. | ||
Auditor Location | New York, NY | ||
Documents Incorporated by Reference | DOCUMENTS INCORPORATED BY REFERENCE The registrant incorporates by reference portions of the M-tron Industries, Inc. definitive proxy statement for the 2023 annual meeting of stockholders (into Items 10, 11, 12, 13 and 14 of Part III of this Annual Report on Form 10-K). | ||
Common Stock [Member] | |||
Document Information [Line Items] | |||
Trading Symbol | MPTI | ||
Title of 12(b) Security | Common Stock, $0.01 par value | ||
Security Exchange Name | NYSEAMER |
Consolidated and Combined State
Consolidated and Combined Statements of Operations - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | ||||||||
Dec. 31, 2022 | Sep. 30, 2022 | Jun. 30, 2022 | Mar. 31, 2022 | Dec. 31, 2021 | Sep. 30, 2021 | Jun. 30, 2021 | Mar. 31, 2021 | Dec. 31, 2022 | Dec. 31, 2021 | |
Income Statement [Abstract] | ||||||||||
REVENUES | $ 8,673 | $ 8,417 | $ 7,064 | $ 7,691 | $ 6,860 | $ 7,173 | $ 6,407 | $ 6,254 | $ 31,845 | $ 26,694 |
Type of Revenue [Extensible List] | us-gaap:ProductMember | us-gaap:ProductMember | us-gaap:ProductMember | us-gaap:ProductMember | us-gaap:ProductMember | us-gaap:ProductMember | us-gaap:ProductMember | us-gaap:ProductMember | us-gaap:ProductMember | us-gaap:ProductMember |
Costs and expenses: | ||||||||||
Manufacturing cost of sales | $ 5,580 | $ 5,688 | $ 4,412 | $ 4,819 | $ 4,520 | $ 4,636 | $ 3,945 | $ 4,257 | $ 20,499 | $ 17,358 |
Engineering, selling and administrative | 2,265 | 2,099 | 2,049 | 2,058 | 2,142 | 1,716 | 1,669 | 1,695 | 8,471 | 7,222 |
OPERATING INCOME | 828 | 630 | 603 | 814 | 198 | 821 | 793 | 302 | 2,875 | 2,114 |
Other Expense: | ||||||||||
Interest expense, net | (5) | (1) | (2) | (3) | (3) | (3) | (3) | (3) | (11) | (12) |
Other (expense) income, net | (228) | (15) | (9) | (17) | (10) | (18) | (7) | 46 | (269) | 11 |
Total other expense, net | (233) | (16) | (11) | (20) | (13) | (21) | (10) | 43 | (280) | (1) |
INCOME BEFORE INCOME TAXES | 595 | 614 | 592 | 794 | 185 | 800 | 783 | 345 | 2,595 | 2,113 |
Income tax provision | 405 | 111 | 106 | 175 | 159 | 162 | 146 | 64 | 797 | 531 |
NET INCOME | $ 190 | $ 503 | $ 486 | $ 619 | $ 26 | $ 638 | $ 637 | $ 281 | $ 1,798 | $ 1,582 |
Net Income per Basic Share | $ 0.07 | $ 0.19 | $ 0.18 | $ 0.23 | $ 0.01 | $ 0.24 | $ 0.24 | $ 0.10 | $ 0.67 | $ 0.59 |
Net income per Dilutive Share | $ 0.05 | $ 0.19 | $ 0.18 | $ 0.23 | $ 0.01 | $ 0.24 | $ 0.24 | $ 0.10 | $ 0.67 | $ 0.59 |
Consolidated and Combined Balan
Consolidated and Combined Balance Sheets - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Current Assets: | ||
Cash and cash equivalents | $ 926 | $ 2,635 |
Accounts receivable, net of allowances of $142 and $131, respectively | 5,197 | 3,995 |
Inventories, net | 7,518 | 5,221 |
Prepaid expenses and other current assets | 673 | 242 |
Total Current Assets | 14,314 | 12,093 |
Property, Plant and Equipment | ||
Land | 536 | 536 |
Buildings and improvements | 4,937 | 4,869 |
Machinery and equipment | 19,044 | 18,176 |
Gross property, plant and equipment | 24,517 | 23,581 |
Less: accumulated depreciation | (20,870) | (20,199) |
Net property, plant and equipment | 3,647 | 3,382 |
Right-of-use lease asset | 147 | 218 |
Due from related party | 1,969 | |
Intangible assets, net | 98 | 152 |
Deferred income tax asset | 1,051 | 2,187 |
Other assets | 16 | 5 |
Total Assets | 19,273 | 20,006 |
Current Liabilities: | ||
Accounts payable | 2,381 | 1,396 |
Accrued compensation and commissions expense | 1,627 | 1,213 |
Other accrued expenses | 614 | 403 |
Income taxes payable | 234 | |
Total Current Liabilities | 4,856 | 3,012 |
Long-term lease liability | 76 | 145 |
Total Liabilities | 4,932 | 3,157 |
Contingencies (Note I) | ||
Stockholders' Equity | ||
Preferred stock - $0.01 par value; 5,000,000 shares authorized, none issued | ||
Common stock - $0.01 par value; 25,000,000 shares authorized; 2,726,798 and 0 shares issued and outstanding, respectively. | 27 | |
Additional paid-in capital | 14,102 | |
Retained earnings | 212 | |
Net investment by The LGL Group, Inc. | 16,849 | |
Total Equity | 14,341 | 16,849 |
Total Liabilities and Stockholders' Equity | $ 19,273 | $ 20,006 |
Consolidated and Combined Bal_2
Consolidated and Combined Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Current Assets: | ||
Accounts receivable, allowances | $ 142 | $ 131 |
Stockholders' Equity | ||
Preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized (in shares) | 5,000,000 | 5,000,000 |
Preferred stock, shares issued | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized (in shares) | 25,000,000 | 25,000,000 |
Common stock, shares issued (in shares) | 2,726,798 | 0 |
Common stock, shares outstanding (in shares) | 2,726,798 | 0 |
Consolidated And Combined Sta_2
Consolidated And Combined Statements of Stockholders' Equity - USD ($) $ in Thousands | Total | LGL Group, inc. | Common Stock [Member] | Common Stock [Member] LGL Group, inc. | Paid-In Capital | Paid-In Capital LGL Group, inc. | Net Investment by The LGL Group, Inc. | Net Investment by The LGL Group, Inc. LGL Group, inc. | Retained Earnings |
Balance at Dec. 31, 2020 | $ 14,974 | $ 14,974 | |||||||
Net income | 1,582 | 1,582 | |||||||
Net transfers to The LGL Group, inc. | $ 293 | $ 293 | |||||||
Balance at Dec. 31, 2021 | $ 16,849 | 16,849 | |||||||
Balance, Shares at Dec. 31, 2021 | 0 | ||||||||
Net income | $ 1,798 | $ 1,586 | $ 212 | ||||||
Net transfers to The LGL Group, inc. | $ (4,386) | (4,386) | |||||||
Transfer by The LGL Group, Inc. to Capital and Paid-in Capital | $ 14,022 | $ (14,049) | |||||||
Transfer by The LGL Group, Inc. to Capital and Paid-in Capital, Shares | 27 | ||||||||
Share-based Compensation and Other | 80 | $ 80 | |||||||
Balance at Dec. 31, 2022 | $ 14,341 | $ 14,102 | $ 212 | ||||||
Balance, Shares at Dec. 31, 2022 | 2,726,798 | 27 |
Consolidated and Combined Sta_3
Consolidated and Combined Statements of Cash Flows - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
OPERATING ACTIVITIES | ||
Net income | $ 1,798,000 | $ 1,582,000 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation | 671,000 | 488,000 |
Amortization of finite-lived intangible assets | 54,000 | 54,000 |
Stock-based compensation expense | 458,000 | 292,000 |
Deferred income tax expense | 1,136,000 | 507,000 |
Changes in operating assets and liabilities: | ||
Increase in accounts receivable, net | (1,202,000) | (47,000) |
Increase in inventories, net | (2,297,000) | (116,000) |
(Increase) decrease in prepaid expenses and other assets | (422,000) | 2,000 |
Increase in accounts payable, accrued compensation and commissions expense, and other | 1,846,000 | 198,000 |
Net cash provided by operating activities | 2,042,000 | 2,960,000 |
INVESTING ACTIVITIES | ||
Capital expenditures | (936,000) | (1,099,000) |
Net cash used in investing activities | (936,000) | (1,099,000) |
FINANCING ACTIVITIES | ||
Net transfers from The LGL Group, Inc. | (309,000) | 1,000 |
Prepaid financing costs | (20,000) | |
Payments to related party | (2,476,000) | (1,683,000) |
Tax payments related to share-based awards | (10,000) | |
Net cash used in financing activities | (2,815,000) | (1,682,000) |
(Decrease) increase in cash and cash equivalents | (1,709,000) | 179,000 |
Cash and cash equivalents at beginning of year | 2,635,000 | 2,456,000 |
Cash and cash equivalents at end of year | $ 926,000 | $ 2,635,000 |
Description of Business, Basis
Description of Business, Basis of Presentation and Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2022 | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |
Description of Business, Basis of Presentation and Summary of Significant Accounting Policies | A. Description of Business M-tron Industries, Inc. (the “Company”, “we”, “our” or “us”) was founded in 1965 and is engaged in the designing, manufacturing and marketing of highly engineered, high reliability frequency and spectrum control products used to control the frequency or timing of signals in electronic circuits in various applications. The Company’s operations include its two principal subsidiaries, (1) Piezo Technology, Inc. ("PTI") and (2) M-tron Asia, LLC ("Mtron"). The Company has operations in Orlando, Florida; Yankton, South Dakota; and Noida, India, and has sales offices in Austin, Texas and Hong Kong. The Company and its subsidiaries currently operate together as a single group under the MtronPTI brand (“Mtron PTI”). The Company offers a wide range of precision frequency control and spectrum control solutions including radio frequency (“RF”), microwave and millimeter wave filters; cavity, crystal, ceramic, lumped element and switched filters; high performance and high frequency OCXOs, integrated PLL OCXOs, TCXOs, VCXOs, low jitter and harsh environment oscillators; crystal resonators, Integrated Microwave Assemblies (IMA), and state-of-the-art solid state power amplifier products. Impact of MtronPTI’s Separation On August 3, 2022, The LGL Group, Inc. (“LGL Group” or “LGL”) announced that its board of directors approved the previously announced separation of the MtronPTI business into an independent, publicly traded company (the "Separation"). Prior to the Separation, LGL Group operated its electronic instruments business segment through its wholly owned subsidiary, Precise Time and Frequency, LLC (“PTF”) and its electronic components business segment through MtronPTI. On October 7, 2022 (the “Distribution Date”), the Separation of the MtronPTI business was completed and the Company became an independent, publicly traded company trading on the NYSE American under the stock symbol "MPTI." The Separation was completed through LGL Group’s distribution (the “Distribution”) of 100% of the shares of the Company’s common stock to holders of LGL Group's common stock as of the close of business on September 30, 2022, the record date for the Distribution. As a result of the Distribution, LGL Group's stockholders of record received one-half share of the Company's common stock for every share of LGL Group's common stock held by them. LGL Group retained no ownership interest in the Company following the Separation. Basis of Presentation - Consolidated and Combined Financial Statements The Company’s financial statements for periods through the Separation are combined financial statements prepared on a “carve-out” basis as discussed below. The Company’s financial statements for the period from October 7, 2022 through December 31, 2022 are consolidated financial statements based on the reported results of the Company as a standalone company. The Consolidated and Combined Financial Statements and accompanying notes have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”). These Consolidated and Combined Financial Statements may not be indicative of the Company’s future performance and do not necessarily reflect what the financial position, results of operations, and cash flows would have been had the Company operated as an independent company during the periods presented. Basis of Presentation – Prior to Separation Through the Separation date, the Company's combined financial statements are prepared on a "carve-out" basis. The Consolidated and Combined Financial Statements have been derived from the consolidated financial statements and accounting records of LGL Group in conformity with GAAP. The Consolidated and Combined Financial Statements include the accounts of the Company and all of its majority-owned subsidiaries. Intercompany transactions and accounts have been eliminated. Transactions between the Company and LGL Group have been included in these Consolidated and Combined Financial Statements. For those transactions between the Company and LGL Group that have been historically settled in cash, the Company has reflected such balances in the Consolidated and Combined Balance Sheets as Due from Related Party. The aggregate net effect of transactions between the Company and related parties that have been historically settled other than in cash are reflected in the Consolidated and Combined Balance Sheets as Net Investment by LGL Group, Inc. and in the Consolidated and Combined Statements of Cash Flows as Net Transfers from LGL Group, Inc. For additional information, see Note B – Related Party Transactions. The Consolidated and Combined Balance Sheets include certain LGL Group assets and liabilities that are specifically identifiable or otherwise attributable to the Company. The debt and associated interest expense in these Consolidated and Combined Financial Statements relate to third-party borrowings under a revolving credit agreement specifically attributable to legal obligations of the Company. The Cash and Cash Equivalents held by LGL Group at the corporate level are not specifically identifiable to the Company and, therefore, have not been reflected in the Company’s Consolidated and Combined Balance Sheets. Cash and Cash Equivalents in the Consolidated and Combined Balance Sheets represent Cash and Cash Equivalents held by the Company at the respective period-ends. The Consolidated and Combined Statements of Operations include an allocation for certain corporate and shared service functions historically provided by LGL Group, including, but not limited to, executive oversight, accounting, tax, and other shared services. These expenses have been allocated to us on the basis of direct usage when identifiable, with the remainder allocated on a pro rata basis of consolidated sales or other measures considered to be a reasonable reflection of the historical utilization levels of these services. Management believes the assumptions underlying our Consolidated and Combined Financial Statements, including the assumptions regarding the allocation of general corporate expenses from LGL Group, are reasonable. Nevertheless, our Consolidated and Combined Financial Statements may not include all of the actual expenses that would have been incurred and may not reflect our results of operations, financial position and cash flows had we operated as a standalone company during the periods presented. Actual costs that would have been incurred if we had operated as a standalone company would depend on multiple factors, including organizational structure and strategic decisions made in various areas, including information technology and infrastructure. During the periods presented in these Consolidated and Combined Financial Statements, the Company’s income tax expense and deferred tax balances have been included in the LGL Group’ income tax returns. Income tax expense and deferred tax balances contained in the Consolidated and Combined Financial Statements are presented on a separate return basis, as if the Company had filed its own income tax returns. The taxes recorded in the Consolidated and Combined Statements of Operations are not necessarily representative of the taxes that may arise in the future when the Company files its income tax returns independent from LGL Group’s income tax returns. Uses of Estimates The preparation of the Consolidated and Combined Financial Statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates. Cash and Cash Equivalents Cash and cash equivalents consist of highly liquid investments with no maturity or with a maturity of less than three months when purchased. Accounts Receivable Accounts receivable consists principally of amounts due from both domestic and foreign customers. Credit is extended based on an evaluation of the customer's financial condition and collateral is not required. In relation to export sales, the Company requires letters of credit supporting a significant portion of the sales price prior to production to limit exposure to credit risk. Certain credit sales are made to industries that are subject to cyclical economic changes. The Company maintains allowances for doubtful accounts for estimated losses resulting from the inability of its customers to make required payments. These allowances are maintained at a level that management believes is sufficient to cover potential credit losses. Estimates are based on historical collection experience, current trends, credit policy and the relationship between accounts receivable and revenues. In determining these estimates, the Company examines historical write-offs of its receivables and reviews each customer's account to identify any specific customer collection issues. If the financial condition of its customers were to deteriorate, resulting in an impairment of their ability to make payment, additional allowances might be required. Inventories Inventories are valued at the lower of cost or net realizable value using the FIFO (first-in, first-out) method. The Company maintains a reserve for inventory based on estimated losses that result from inventory that becomes obsolete or for which the Company has excess inventory levels. In determining these estimates, the Company performs an analysis on current demand and usage for each inventory item over historical time periods. Based on that analysis, the Company reserves a percentage of the inventory amount within each time period based on historical demand and usage patterns of specific items in inventory. Property, Plant and Equipment, Net Property, plant and equipment are recorded at cost less accumulated depreciation and include expenditures for major improvements. Maintenance and repairs are charged to operations as incurred. Depreciation is computed for financial reporting purposes using the straight-line method over the estimated useful lives of the assets, which range from 5 years to 35 years for buildings and improvements, and from 3 years to 10 years for other fixed assets. Property, plant and equipment are periodically reviewed for indicators of impairment. If any such indicators were noted, the Company would assess the appropriateness of the assets' carrying value and record any impairment at that time. Depreciation expense was $671,000 for 2022 and $488,000 for 2021. Intangible Assets Intangible assets are recorded at cost less accumulated amortization. Amortization is computed for financial reporting purposes using the straight-line method over the estimated useful lives of the assets, which range up to 10 years. The intangible assets consist of intellectual property and goodwill. The net carrying value of the amortizable intangible assets was $58,000 The estimated aggregate amortization expense for intangible assets, excluding goodwill, for each of the remaining years of the estimated useful life is as follows (in thousands): 2023 $ 54 2024 4 Total $ 58 Warranties The Company offers a standard one-year Each month, the Company records a specific warranty reserve for approved RMAs covering products that have not yet been returned. The Company does not maintain a general warranty reserve because, historically, valid warranty returns resulting from a product not meeting specifications or being non-functional have been de minimis. As of December 31, 2022 and 2021, accrued warranty reserve was $95,000 Revenue Recognition The Company recognizes revenue from the sale of its products in accordance with the criteria in Accounting Standards Codification (“ASC”) 606, Revenue from Contracts with Customers Step 1: Identify the contract(s) with a customer. Step 2: Identify the performance obligations in the contract. Step 3: Determine the transaction price. Step 4: Allocate the transaction price to the performance obligations in the contract. Step 5: Recognize revenue when (or as) the entity satisfies a performance obligation. The Company meets these conditions upon the Company’s satisfaction of the performance obligation, usually at the time of shipment to the customer, because control passes to the customer at that time. Our standard payment terms for customers are net due within 30 days, with a few exceptions, none regularly exceeding 60 days. The Company provides disaggregated revenue details by geographic markets in Note J – Domestic and Foreign Revenues. The Company offers a limited right of return and/or authorized price protection provisions in its agreements with certain electronic component distributors who resell the Company's products to original equipment manufacturers or electronic manufacturing services companies. As a result, the Company estimates and records a reserve for future returns and other charges against revenue at the time of shipment consistent with the terms of sale. The reserve is estimated based on historical experience with each respective distributor. These reserves and charges are immaterial as the Company does not have a history of significant price protection adjustments or returns. The Company provides a standard assurance warranty that does not create a performance obligation. Practical Expedients: - The Company applies the practical expedient for shipping and handling as fulfillment costs. - The Company expenses sales commissions as sales and marketing expenses in the period they are incurred. Shipping Costs Amounts billed to customers related to shipping and handling are classified as revenue, and the Company's shipping and handling costs are included in manufacturing cost of sales. Research and Development Costs Research and development costs are charged to operations as incurred. Such costs were $2,006,000 for both 2022 and 2021, and are included within engineering, selling and administrative expenses. Stock-Based Compensation The Company measures the cost of employee services in exchange for an award of equity instruments based on the grant-date fair value of the award and recognizes the cost over the requisite service period, typically the vesting period. The Company estimates the fair value of stock options on the grant date using the Black-Scholes-Merton option-pricing model. The Black-Scholes-Merton option-pricing model requires subjective assumptions, including future stock price volatility and expected time to exercise, which greatly affect the calculated values. There is no expected dividend rate. Historical Company information was the basis for the expected volatility assumption as the Company believes that the historical volatility over the life of the option is indicative of expected volatility in the future. The risk-free interest rate is based on the U.S. Treasury zero-coupon rates with a remaining term equal to the expected term of the option. The Company records any forfeitures in the period that the shares are forfeited. Restricted stock awards are measured at the fair value of the Company's common stock on the date of the grant and recognized over the respective service period. Earnings Per Share The Company computes earnings per share in accordance with ASC 260, Earnings Per Share. On October 7, 2022, the Separation was achieved through LGL Group's distribution of 100% of the shares of the Company's common stock to holders of LGL Group's common stock as of the close of business on the record date of September 30, 2022. LGL Group's stockholders of record received one-half share of the Company's common stock for every share of LGL Group's common stock held by them. As a result, on October 7, 2022, the Company had 2.67 million shares of common stock outstanding. This share amount is being utilized for the calculation of basic and diluted earnings per share for all periods presented prior to the Separation. After the Separation, actual outstanding shares are used to calculate both basic and diluted weighted-average number of shares of common stock outstanding. Options representing 9,710 shares were excluded from the below calculation because they would have been anti-dilutive. Years Ended December 31, 2022 2021 Weighted average shares outstanding - basic 2,676,480 2,676,469 Effect of dilutive securities 44 — Weighted average shares outstanding - diluted 2,676,524 2,676,469 Income Taxes The Company accounts for income taxes under the asset and liability method. Under this method, taxes currently payable or refundable are accrued, and deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets are also recognized for realizable operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted income tax rates in effect for the year in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in income tax rates is recognized in the Company’s Consolidated and Combined Statement of Operations in the period that includes the enactment date. A valuation allowance is recorded to reduce the carrying amounts of deferred tax assets if it is more likely than not that such assets will not be realized. The Global Intangible Low-Taxed Income ("GILTI") provisions of the Tax Reform Act, enacted on December 22, 2017, require the Company to include in its U.S. income tax return foreign subsidiary earnings in excess of an allowable return on the foreign subsidiary's tangible assets. An accounting policy election is available to either account for the tax effects of GILTI in the period that is subject to such taxes or to provide deferred taxes for book and tax basis differences that upon reversal may be subject to such taxes. The Company has elected to account for the tax effects of these provisions in the period that is subject to such tax, and the impact was reflected in the Company’s 2022 provision. In determining the Company’s provision for income taxes, the Company considers permanent differences between book and tax income and statutory income tax rates. The Company follows a two-step approach to recognize and measure uncertain tax positions. The first step is to evaluate the tax position for recognition by determining if the available evidence indicates it is more likely than not that the position will be sustained on audit, including resolution of related appeals or litigation processes, if any. The second step is to measure the tax benefit as the largest amount which is more than 50% likely of being realized upon ultimate settlement. The Company considers many factors when evaluating and estimating its tax positions and tax benefits, which may require periodic adjustments and for which actual outcomes may differ from forecasted outcomes. The Company's policy is to include interest and penalties related to uncertain tax positions in income tax expense. Effective for tax years beginning after December 31, 2021, taxpayers are required to capitalize any expenses incurred that are considered incidental to research and experimentation (R&E) activities under IRC Section 174. While taxpayers historically had the option of deducting these expenses under IRC Section 174, the December 2017 Tax Cuts and Jobs Act mandates capitalization and amortization of R&E expenses for tax years beginning after December 31, 2021. Expenses incurred in connection with R&E activities in the US must be amortized over a 5-year period if incurred, and R&E expenses incurred outside the US must be amortized over a 15-year period. R&E activities are broader in scope than qualified research activities that are considered under IRC Section 41 (relating to the research tax credit). The Company includes its tax contingencies accrual, including accrued penalties and interest, in Other Long-term Liabilities on the Consolidated and Combined Balance Sheets unless the liability is expected to be paid within one year. Changes to the tax contingencies accrual, including accrued penalties and interest, are included in Income Tax Provision on the Consolidated and Combined Statements of Operations. Concentration Risks For the year ended December 31, 2022, the Company's largest customer, the year ended December 31, 2022 , a defense contractor, accounted for $ , or 15.3 %, of the Company's total revenues, compared to $3,138,000 , or 11.8% , of the Company’s total revenues for the year ended December 31, 2021 . A significant portion of the Company's accounts receivable is concentrated with a relatively small number of customers. As of December 31, 2022, four of the Company's largest customers accounted for approximately $2,872,000, or 53.8%, of accounts receivable. As of December 31, 2021, four of the Company's largest customers accounted for approximately $2,568,000, or 62.3%, of accounts receivable. The Company carefully evaluates the creditworthiness of its customers in deciding to extend credit and utilizes letters of credit to further limit credit risk for export sales. As a result of these policies, the Company has experienced very low historical bad debt expense and believes the related risk to be minimal. At various times throughout the year and at December 31, 2022 and 2021, some deposits held at financial institutions were in excess of federally insured limits. The Company has not experienced any losses related to these balances. Segment Information The Company reports segment information in accordance with ASC 280, Segment Information Impairments of Long-Lived Assets Long-lived assets, including intangible assets subject to amortization, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of the asset may not be recoverable. Long-lived assets are grouped with other assets to the lowest level to which identifiable cash flows are largely independent of the cash flows of other groups of assets and liabilities. Management assesses the recoverability of the carrying cost of the assets based on a review of projected undiscounted cash flows. If an asset is held for sale, management reviews its estimated fair value less cost to sell. Fair value is determined using pertinent market information, including appraisals or broker's estimates, and/or projected discounted cash flows. In the event an impairment loss is identified, it is recognized based on the amount by which the carrying value exceeds the estimated fair value of the long-lived asset. The Company performed an assessment to determine if there were any indicators of impairment as a result of the operating conditions resulting from the coronavirus (“COVID-19”) pandemic at the end of each 2022 fiscal quarter, including at December 31, 2022. The Company concluded that, while there were events and circumstances in the macro-environment that did impact us, we did not experience any entity-specific indicators of asset impairment and no triggering events occurred. Financial Instruments Cash and cash equivalents, trade accounts receivable, trade accounts payable and accrued expenses are carried at cost which approximates fair value due to the short-term maturity of these instruments. Foreign Currency Translation The assets and liabilities of international operations are remeasured at the exchange rates in effect at the balance sheet date for monetary assets and liabilities and at historical rates for nonmonetary assets and liabilities, with the related remeasurement gains or losses reported within the consolidated statement of operations. The results of international operations are remeasured at the monthly average exchange rates. The Company's foreign subsidiaries and respective operations' functional currency is the U.S. dollar. The Company has determined this based upon the majority of transactions with customers as well as intercompany transactions and parental support being based in U.S. dollars. The Company has recognized a remeasurement loss of $82,000 and $11,000 in 2022 and 2021, respectively, which is included within other income (expense), net in the Consolidated and Combined Statements of Operations. Recently Issued Accounting Pronouncements In June 2016, the Financial Accounting Standards Board (“FASB”) issued ASU 2016-13, “ Financial Instruments-Credit Losses: Measurement of Credit Losses on Financial Instruments (ASU 2016-13 model to estimate credit losses for financial assets. The Company adopted the provisions of this standard on January 1, 2023 , with minimal effect on its financial statements. |
Related Party Transactions
Related Party Transactions | 12 Months Ended |
Dec. 31, 2022 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | B. Related Party Transactions The Consolidated and Combined Financial Statements are prepared on a standalone basis through the date of Separation and have been derived from the consolidated financial statements and accounting records of LGL Group through the date of Separation. The following discussion summarizes activity between the Company and LGL Group prior to the Separation. Allocation of General Corporate Expenses For purposes of preparing these Consolidated and Combined Financial Statements on a “carve-out” basis, for periods prior to the Separation we have allocated a portion of LGL Group’s corporate expenses totaling $946,000 and $921,000 to the Company for the years ended December 31, 2022 and 2021, respectively, which are recorded within engineering, selling and administrative expenses. See Note A – Description of Business, Basis of Presentation and Summary of Significant Accounting Policies for a discussion of the methodology used to allocate corporate-related costs for purposes of preparing these Consolidated and Combined Financial Statements on a “carve-out” basis. Due to and from Related Parties Balances between the Company and LGL Group that are derived from transactions that have been historically cash settled are reflected in the Consolidated and Combined Balance Sheets as Due from related party. Balances between the Company and LGL Group, Inc. or its affiliates derived from transactions that have been historically settled other than in cash are included in Net Investment by The LGL Group, Inc. within Equity on the Consolidated Combined Balance Sheets. Net Transfers to LGL Group, Inc. The following table presents the components of Net Transfers to LGL Group, Inc. in the 2022 and 2021 Consolidated and Combined Statements of Stockholders’ Equity: December 31, 2022 2021 (in thousands) Corporate Expense Allocations $ 325 $ 29 Share-based Compensation Expense 378 292 Assumed Income Tax Payments (644 ) (28 ) Write off Intercompany Balance (4,445 ) — Total Net Transfers to LGL Group $ (4,386 ) $ 293 LGL Group’s board of directors initially approved a budget of $400,000 for Separation costs. However, the total Separation costs incurred through December 31, 2022 are $838,000 which is $438,000 greater than the budgeted amount. MtronPTI and LGL Group have agreed to share any excess Separation costs. Included in other expense is an amount of $219,000 which represents 50% of the excess Separation costs incurred through December 31, 2022. |
Inventories
Inventories | 12 Months Ended |
Dec. 31, 2022 | |
Inventory Disclosure [Abstract] | |
Inventories | C. The Company reduces the value of its inventories to net realizable value when the net realizable value is believed to be less than the cost of the item. The inventory reserve for excess and obsolescence inventory as of December 31, 2022 and 2021 was $1,318,000 and $1,381,000, respectively. The components of inventory as of December 31, 2022 and 2021 are summarized below: December 31, 2022 2021 (in thousands) Raw materials $ 3,335 $ 2,061 Work in process 3,173 2,190 Finished goods 1,010 970 Total Inventories, net $ 7,518 $ 5,221 |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2022 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | D. Income Taxes Prior to the Separation, the Company's U.S. operations and certain of its non-U.S. operations were historically included in the income tax returns of LGL Group or its subsidiaries. For the periods prior to the Separation, the income tax expense and all tax liabilities that are presented in these financial statements were calculated on a "carve-out" basis, which applied the accounting guidance as if the Company filed income tax returns on a standalone, separate return basis. The Company believes the assumptions supporting its allocation and presentation of income taxes on a separate return basis are reasonable. However, the Company's tax results, as presented in these financial statements for periods prior to the Separation, may not be reflective of the results that the Company expects to generate in the future. Post-Separation, the Company will file a consolidated U.S. federal income tax return as well as separate and combined income tax returns in various state, local and international jurisdictions. Income tax expense for the period prior to the Separation is based on the combined financial statements prepared on a "carve-out" basis. Income tax expense for the period after the Separation is based on the consolidated results of the Company on a standalone basis. Income tax provision for the years ended December 31, 2022 and 2021 is as follows: 2022 2021 (in thousands) Current: Federal $ 703 $ — State and local 188 23 Foreign 213 - Total Current 1,104 23 Deferred: Federal (263 ) 455 State and local (78 ) 52 Foreign 34 1 Net deferred (307 ) 508 Income tax provision $ 797 $ 531 A reconciliation of the provision for income taxes and the amount computed by applying the statutory federal income tax rate to income before income taxes is detailed below: 2022 2021 (in thousands) Tax provision at expected statutory rate $ 544 $ 444 State taxes, net of federal benefit 91 75 Permanent differences 83 3 Tax credits (61 ) (74 ) Foreign tax expense, and other 161 (12 ) Change in rate — 1 Change in valuation allowance — (374 ) Change in uncertain tax positions — 448 Other (21 ) 20 Provision for income taxes $ 797 $ 531 Effective tax rate 30.7 % 25.1 % Deferred income taxes for 2022 and 2021 were provided for the temporary differences between the financial reporting basis and the income tax basis of the Company's assets and liabilities. Tax effects of temporary differences and carryforwards at December 31, 2022 and 2021 were as follows: December 31, 2022 December 31, 2021 Deferred Tax Deferred Tax Asset Liability Asset Liability (in thousands) Inventory reserve $ 320 $ — $ 334 $ — Fixed assets 471 80 — 44 Other reserves and accruals 181 — 181 — Stock-based compensation 61 — 2 — Other 84 36 — 15 Tax credit carryforwards 50 — 1,343 — Federal tax loss carryforwards — — 204 — State tax loss carryforwards — — 148 — Foreign tax loss carryforwards — — 34 — Total deferred income taxes 1,167 $ 116 2,246 $ 59 Net deferred tax assets $ 1,051 $ 2,187 As of December 31, 2022, our unrecognized tax benefits totaled $77,000, and are included within other liabilities in our Consolidated and Combined Balance Sheet. The following table summarizes the activity related to the Company’s unrecognized tax benefits, without interest and penalties: 2022 2021 (in thousands) Balance at January 1 $ 448 $ — Additions for tax positions of prior years — 419 Additions based on tax positions related to the current year 77 29 Transfer to LGL Group, Inc. (448 ) — Balance at December 31 $ 77 $ 448 The Company will recognize any interest and penalties related to unrecognized tax positions in Income Tax Provision in the Consolidated and Combined Statements of Operations. As of December 31, 2022, the Company had Federal and research and development tax credit carryforwards of approximately $50,000 available to reduce future tax liabilities, which will begin to expire starting in 2027. The Company will file a U.S. federal income tax return as well as income tax returns in various states and in non-U.S. jurisdictions. The Company has not filed its initial consolidated U.S. federal income tax return; therefore, there are no open Internal Revenue Service examinations. On August 19, 2022, the Company and LGL Group entered into an Amended and Restated Tax Indemnity and Sharing Agreement. Under the agreement, LGL Group will generally be responsible for all U.S. federal, state, local and non-U.S. income taxes of the Company for any taxable period, or portion of such period, ending on or before the Separation. Accordingly, the net liabilities associated with uncertain tax positions that were presented in the financial statements in prior periods on a carve-out basis were not transferred to the Company as part of the Separation. |
Revolving Credit Agreement
Revolving Credit Agreement | 12 Months Ended |
Dec. 31, 2022 | |
Line Of Credit Facility [Abstract] | |
Revolving Credit Agreement | E. Revolving Credit Agreement On May 12, 2022, the loan agreement for a revolving line of credit with Synovus Bank matured. At December 31, 2021, there were no outstanding borrowings under the revolving line of credit with Synovus Bank. On June 15, 2022, MtronPTI entered into a loan agreement (the “Loan Agreement”) for a revolving line of credit with Fifth Third Bank, National Association (“Fifth Third Bank”), for up to $ 5,000,000 bearing interest at the Secured Overnight Financing Rate (“SOFR”) plus a margin of 2.25 % , with a SOFR floor of 0.00 % . The Loan Agreement has a maturity date of June 15, 2025 and contains various affirmative and negative covenants that are customary for lines of credit and transactions of this type, including limitations on the incurrence of debt and liabilities, as well as financial reporting requirements. The Loan Agreement also imposes certain financial covenants based on Debt Service Coverage Ratio, Current Ratio, and the Ratio of Total Liabilities to Total Net Worth (as such terms are defined in the Loan Agreement). All loans pursuant to the Loan Agreement will be secured by a continuing and unconditional first priority security interest in and to any and all property of the Company. At December 31 , 2022, there were no outstanding borrowings under the revolving line of credit with Fifth Third Bank . |
Leases
Leases | 12 Months Ended |
Dec. 31, 2022 | |
Leases [Abstract] | |
Leases | F. The Company leases certain manufacturing and office space and equipment. We determine if an arrangement is a lease at inception. A contract is or contains a lease if the contract conveys the right to control the use of identified property, plant or equipment (an identified asset) for a period of time in exchange for consideration. Amounts associated with operating leases, which are not short-term, are included in right-of-use lease assets. Current lease liabilities are included in other accrued expenses and long-term lease liabilities are included in other liabilities in our Consolidated and Combined Balance Sheets. Right-of-use lease assets represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease. Right-of-use lease assets and liabilities are recognized at the lease commencement date based on the estimated present value of lease payments over the lease term. The Company uses its incremental borrowing rate at the lease commencement date in determining the present value of lease payments. Short-term leases, leases with an initial term of 12 months or less, are not recorded in the Consolidated and Combined Balance Sheets; we recognize lease expense for these short-term leases on a straight-line basis over the lease term. The Company leases certain property and equipment under operating leases with terms that range from one to five years. Our lease agreements do not contain any material residual value guarantees or material restrictive covenants. During the year ended December 31, 2021, we renewed our lease on our facility in Hong Kong, resulting in the addition of $80,000 in right-of-use lease assets in exchange for operating lease liabilities. Total operating lease costs amounted to $349,000 and $476,000 for the years ended December 31, 2022 and 2021, respectively. At December 31, 2022 and 2021, our total lease obligation was $147,000 and $218,000, respectively, of which the current portion of $71,000 and $73,000, respectively, was included in other accrued expenses on the Consolidated and Combined Balance Sheets. The weighted average discount rate for the years ended December 31, 2022 and 2021 was 6.3% and 4.2%, respectively. At December 31, 2022 and 2021, the weighted average remaining lease term was 2 years and 3 years, respectively. Future minimum lease payment obligations under operating leases are as follows (in thousands): 2022 2023 $ 73 2024 73 2025 12 Total lease payments 158 Less: interest (11 ) Present value of lease payments $ 147 |
Stock-Based Compensation
Stock-Based Compensation | 12 Months Ended |
Dec. 31, 2022 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | |
Stock-Based Compensation | G. Prior to the Separation, certain Company employees participated in LGL Group’s stock plan ("LGL Group's Plan"). In connection with the Separation, the Company's board of directors (the “Board”) approved the Amended and Restated 2022 Incentive Plan (the “2022 Plan”), including the authority to issue 500,000 shares of common stock pursuant to the 2022 Plan. The 2022 Plan is the only long-term plan under which equity compensation may be awarded to employees, advisors and members of the Board aligning their interest with those of stockholders. At December 31, 2022, 449,671 shares remained available for future issuance under the 2022 Plan. In connection with the Separation, restricted stock and stock option awards granted to Company employees under LGL Group 's Plan were converted to awards representing 60,039 shares of the Company's common stock (the "Converted Awards") under the Company's 2022 Plan. Adjustments to the underlying shares and terms of outstanding restricted stock and stock options were made primarily to preserve the value of the awards immediately before the Separation. The outstanding awards continue to vest over their original vesting periods. The Company recognized $ 20,000 of incremental compensation cost related to the adjustment of an outstanding stock option award. For the period prior to the Separation, the share-based compensation expense recognized by the Company was based on grants related directly to Company employees. Total stock-based compensation expense for the years ended December 31, 2022 and 2021 was $458,000 and $292,000, respectively. Restricted Stock Awards Restricted stock awards are measured at a value equal to the market price of the Company's common stock on the date of grant which is recognized over the service period of the award. The following table provides the Company’s restricted stock activity from the Separation date to December 31, 2022: Number of Shares Weighted Average Grant Date Fair Value Aggregate Grant Date Fair value (in thousands) Unvested Converted Awards as of October 7, 2022 50,329 $ 12.15 $ 611 Vested (3,093 ) 11.64 (36 ) Balance at December 31, 2022 47,236 $ 12.18 $ 575 As of December 31, 2022, there was $316,000 of total unrecognized compensation cost related to nonvested shares granted. The cost is expected to be recognized over a weighted-average period of 1.6 years. Stock Options Option awards are generally granted with an exercise price either at or 10% above the market price of the Company's common stock at the date of grant; those option awards generally have 5-year contractual terms and generally vest over three years. Stock options granted to Company employees under LGL Group's Plan were converted to awards representing 9,710 shares of the Company's common stock. No stock options have been granted by the Company subsequent to the Separation. |
Employee Benefit Plan
Employee Benefit Plan | 12 Months Ended |
Dec. 31, 2022 | |
Compensation And Retirement Disclosure [Abstract] | |
Employee Benefit Plan | H. Employee Benefit Plan LGL Group offered a defined contribution plan for eligible employees that includes discretionary matching contributions up to 50% of the first 6% of eligible compensation contributed by participants. The Company contributed $89,000 and $112,000 in discretionary contributions during 2022 and 2021 respectively. Participants vest in employer contributions starting after their second year of service at 20% increments, vesting 100% in year six. The Company has set up its own defined contribution plan for eligible employees, with similar terms and discretionary contributions, which became effective in January of 2023. |
Contingencies
Contingencies | 12 Months Ended |
Dec. 31, 2022 | |
Commitments And Contingencies Disclosure [Abstract] | |
Contingencies | I. In the normal course of business, the Company and its subsidiaries may become defendants in certain product liability, patent infringement, worker claims and other litigation. The Company records a liability when it is probable that a loss has been incurred and the amount is reasonably estimable. The Company is not involved in any legal proceedings other than routine litigation arising in the normal course of business, none of which the Company believes will have a material adverse effect on the Company's business, financial condition or results of operations. |
Domestic and Foreign Revenues
Domestic and Foreign Revenues | 12 Months Ended |
Dec. 31, 2022 | |
Revenues [Abstract] | |
Domestic and Foreign Revenues | J. Significant foreign revenues from operations (10% or more of foreign sales) were as follows : Years Ended December 31, 2022 2021 (in thousands) Malaysia $ 5,334 $ 2,745 Hong Kong 649 682 All other foreign countries 3,423 2,315 Total foreign revenues $ 9,406 $ 5,742 Total domestic revenues $ 22,439 $ 20,952 The Company allocates its foreign revenue based on the customer's ship-to location . |
Quarterly Financial Data (Unaud
Quarterly Financial Data (Unaudited) | 12 Months Ended |
Dec. 31, 2022 | |
Quarterly Financial Information Disclosure [Abstract] | |
Summery of Quarterly Financial Data | K. The following table provides summarized quarterly financial data for 2022: Q1 2022 Q2 2022 Q3 2022 Q4 2022 REVENUES $ 7,691 $ 7,064 $ 8,417 $ 8,673 Costs and expenses: Manufacturing cost of sales 4,819 4,412 5,688 5,580 Engineering, selling and administrative 2,058 2,049 2,099 2,265 OPERATING INCOME 814 603 630 828 Other Expense: Interest expense, net (3 ) (2 ) (1 ) (5 ) Other (expense) income, net (17 ) (9 ) (15 ) (228 ) Total other expense, net (20 ) (11 ) (16 ) (233 ) INCOME BEFORE INCOME TAXES 794 592 614 595 Income tax provision 175 106 111 405 NET INCOME $ 619 $ 486 $ 503 $ 190 Net Income per Basic and Dilutive Share (a) (b) $ 0.23 $ 0.18 $ 0.19 $ 0.07 (a) Due to changes in stock prices during the year and timing of issuances of shares, the cumulative total of quarterly net income per share amounts may not equal the net income per share for the year. (b) For periods prior to the Separation, basic shares at the Separation date are being utilized for the calculation of basic and diluted net income per share. For additional information regarding the basic shares at the Separation date, see Note A. Description of Business, Basis of Presentation and Summary of Significant Accounting Policies, under “Earnings per Share”. The following table provides summarized quarterly financial data for 2021: Q1 2021 Q2 2021 Q3 2021 Q4 2021 REVENUES $ 6,254 $ 6,407 $ 7,173 $ 6,860 Costs and expenses: Manufacturing cost of sales 4,257 3,945 4,636 4,520 Engineering, selling and administrative 1,695 1,669 1,716 2,142 OPERATING INCOME 302 793 821 198 Other Expense: Interest expense, net (3 ) (3 ) (3 ) (3 ) Other (expense) income, net 46 (7 ) (18 ) (10 ) Total other expense, net 43 (10 ) (21 ) (13 ) INCOME BEFORE INCOME TAXES 345 783 800 185 Income tax provision 64 146 162 159 NET INCOME $ 281 $ 637 $ 638 $ 26 Net Income per Basic and Dilutive Share (a) (b) $ 0.10 $ 0.24 $ 0.24 $ 0.01 (a) Due to changes in stock prices during the year and timing of issuances of shares, the cumulative total of quarterly net income per share amounts may not equal the net income per share for the year. For periods prior to the Separation, basic shares at the Separation date are being utilized for the calculation of basic and diluted net income per share. For additional information regarding the basic shares at the Separation date, |
Description of Business, Basi_2
Description of Business, Basis of Presentation and Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2022 | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |
Basis of Presentation - Consolidated and Combined Financial Statements | Basis of Presentation - Consolidated and Combined Financial Statements The Company’s financial statements for periods through the Separation are combined financial statements prepared on a “carve-out” basis as discussed below. The Company’s financial statements for the period from October 7, 2022 through December 31, 2022 are consolidated financial statements based on the reported results of the Company as a standalone company. The Consolidated and Combined Financial Statements and accompanying notes have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”). These Consolidated and Combined Financial Statements may not be indicative of the Company’s future performance and do not necessarily reflect what the financial position, results of operations, and cash flows would have been had the Company operated as an independent company during the periods presented. Basis of Presentation – Prior to Separation Through the Separation date, the Company's combined financial statements are prepared on a "carve-out" basis. The Consolidated and Combined Financial Statements have been derived from the consolidated financial statements and accounting records of LGL Group in conformity with GAAP. The Consolidated and Combined Financial Statements include the accounts of the Company and all of its majority-owned subsidiaries. Intercompany transactions and accounts have been eliminated. Transactions between the Company and LGL Group have been included in these Consolidated and Combined Financial Statements. For those transactions between the Company and LGL Group that have been historically settled in cash, the Company has reflected such balances in the Consolidated and Combined Balance Sheets as Due from Related Party. The aggregate net effect of transactions between the Company and related parties that have been historically settled other than in cash are reflected in the Consolidated and Combined Balance Sheets as Net Investment by LGL Group, Inc. and in the Consolidated and Combined Statements of Cash Flows as Net Transfers from LGL Group, Inc. For additional information, see Note B – Related Party Transactions. The Consolidated and Combined Balance Sheets include certain LGL Group assets and liabilities that are specifically identifiable or otherwise attributable to the Company. The debt and associated interest expense in these Consolidated and Combined Financial Statements relate to third-party borrowings under a revolving credit agreement specifically attributable to legal obligations of the Company. The Cash and Cash Equivalents held by LGL Group at the corporate level are not specifically identifiable to the Company and, therefore, have not been reflected in the Company’s Consolidated and Combined Balance Sheets. Cash and Cash Equivalents in the Consolidated and Combined Balance Sheets represent Cash and Cash Equivalents held by the Company at the respective period-ends. The Consolidated and Combined Statements of Operations include an allocation for certain corporate and shared service functions historically provided by LGL Group, including, but not limited to, executive oversight, accounting, tax, and other shared services. These expenses have been allocated to us on the basis of direct usage when identifiable, with the remainder allocated on a pro rata basis of consolidated sales or other measures considered to be a reasonable reflection of the historical utilization levels of these services. Management believes the assumptions underlying our Consolidated and Combined Financial Statements, including the assumptions regarding the allocation of general corporate expenses from LGL Group, are reasonable. Nevertheless, our Consolidated and Combined Financial Statements may not include all of the actual expenses that would have been incurred and may not reflect our results of operations, financial position and cash flows had we operated as a standalone company during the periods presented. Actual costs that would have been incurred if we had operated as a standalone company would depend on multiple factors, including organizational structure and strategic decisions made in various areas, including information technology and infrastructure. During the periods presented in these Consolidated and Combined Financial Statements, the Company’s income tax expense and deferred tax balances have been included in the LGL Group’ income tax returns. Income tax expense and deferred tax balances contained in the Consolidated and Combined Financial Statements are presented on a separate return basis, as if the Company had filed its own income tax returns. The taxes recorded in the Consolidated and Combined Statements of Operations are not necessarily representative of the taxes that may arise in the future when the Company files its income tax returns independent from LGL Group’s income tax returns. |
Uses of Estimates | Uses of Estimates The preparation of the Consolidated and Combined Financial Statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates. |
Cash and Cash Equivalents | Cash and Cash Equivalents Cash and cash equivalents consist of highly liquid investments with no maturity or with a maturity of less than three months when purchased. |
Accounts Receivable | Accounts Receivable Accounts receivable consists principally of amounts due from both domestic and foreign customers. Credit is extended based on an evaluation of the customer's financial condition and collateral is not required. In relation to export sales, the Company requires letters of credit supporting a significant portion of the sales price prior to production to limit exposure to credit risk. Certain credit sales are made to industries that are subject to cyclical economic changes. The Company maintains allowances for doubtful accounts for estimated losses resulting from the inability of its customers to make required payments. These allowances are maintained at a level that management believes is sufficient to cover potential credit losses. Estimates are based on historical collection experience, current trends, credit policy and the relationship between accounts receivable and revenues. In determining these estimates, the Company examines historical write-offs of its receivables and reviews each customer's account to identify any specific customer collection issues. If the financial condition of its customers were to deteriorate, resulting in an impairment of their ability to make payment, additional allowances might be required. |
Inventories | Inventories Inventories are valued at the lower of cost or net realizable value using the FIFO (first-in, first-out) method. The Company maintains a reserve for inventory based on estimated losses that result from inventory that becomes obsolete or for which the Company has excess inventory levels. In determining these estimates, the Company performs an analysis on current demand and usage for each inventory item over historical time periods. Based on that analysis, the Company reserves a percentage of the inventory amount within each time period based on historical demand and usage patterns of specific items in inventory. |
Property, Plant and Equipment, Net | Property, Plant and Equipment, Net Property, plant and equipment are recorded at cost less accumulated depreciation and include expenditures for major improvements. Maintenance and repairs are charged to operations as incurred. Depreciation is computed for financial reporting purposes using the straight-line method over the estimated useful lives of the assets, which range from 5 years to 35 years for buildings and improvements, and from 3 years to 10 years for other fixed assets. Property, plant and equipment are periodically reviewed for indicators of impairment. If any such indicators were noted, the Company would assess the appropriateness of the assets' carrying value and record any impairment at that time. Depreciation expense was $671,000 for 2022 and $488,000 for 2021. |
Intangible Assets | Intangible Assets Intangible assets are recorded at cost less accumulated amortization. Amortization is computed for financial reporting purposes using the straight-line method over the estimated useful lives of the assets, which range up to 10 years. The intangible assets consist of intellectual property and goodwill. The net carrying value of the amortizable intangible assets was $58,000 The estimated aggregate amortization expense for intangible assets, excluding goodwill, for each of the remaining years of the estimated useful life is as follows (in thousands): 2023 $ 54 2024 4 Total $ 58 |
Warranties | Warranties The Company offers a standard one-year Each month, the Company records a specific warranty reserve for approved RMAs covering products that have not yet been returned. The Company does not maintain a general warranty reserve because, historically, valid warranty returns resulting from a product not meeting specifications or being non-functional have been de minimis. As of December 31, 2022 and 2021, accrued warranty reserve was $95,000 |
Revenue Recognition | Revenue Recognition The Company recognizes revenue from the sale of its products in accordance with the criteria in Accounting Standards Codification (“ASC”) 606, Revenue from Contracts with Customers Step 1: Identify the contract(s) with a customer. Step 2: Identify the performance obligations in the contract. Step 3: Determine the transaction price. Step 4: Allocate the transaction price to the performance obligations in the contract. Step 5: Recognize revenue when (or as) the entity satisfies a performance obligation. The Company meets these conditions upon the Company’s satisfaction of the performance obligation, usually at the time of shipment to the customer, because control passes to the customer at that time. Our standard payment terms for customers are net due within 30 days, with a few exceptions, none regularly exceeding 60 days. The Company provides disaggregated revenue details by geographic markets in Note J – Domestic and Foreign Revenues. The Company offers a limited right of return and/or authorized price protection provisions in its agreements with certain electronic component distributors who resell the Company's products to original equipment manufacturers or electronic manufacturing services companies. As a result, the Company estimates and records a reserve for future returns and other charges against revenue at the time of shipment consistent with the terms of sale. The reserve is estimated based on historical experience with each respective distributor. These reserves and charges are immaterial as the Company does not have a history of significant price protection adjustments or returns. The Company provides a standard assurance warranty that does not create a performance obligation. Practical Expedients: - The Company applies the practical expedient for shipping and handling as fulfillment costs. - The Company expenses sales commissions as sales and marketing expenses in the period they are incurred. |
Shipping Costs | Shipping Costs Amounts billed to customers related to shipping and handling are classified as revenue, and the Company's shipping and handling costs are included in manufacturing cost of sales. |
Research and Development Costs | Research and Development Costs Research and development costs are charged to operations as incurred. Such costs were $2,006,000 for both 2022 and 2021, and are included within engineering, selling and administrative expenses. |
Stock-Based Compensation | Stock-Based Compensation The Company measures the cost of employee services in exchange for an award of equity instruments based on the grant-date fair value of the award and recognizes the cost over the requisite service period, typically the vesting period. The Company estimates the fair value of stock options on the grant date using the Black-Scholes-Merton option-pricing model. The Black-Scholes-Merton option-pricing model requires subjective assumptions, including future stock price volatility and expected time to exercise, which greatly affect the calculated values. There is no expected dividend rate. Historical Company information was the basis for the expected volatility assumption as the Company believes that the historical volatility over the life of the option is indicative of expected volatility in the future. The risk-free interest rate is based on the U.S. Treasury zero-coupon rates with a remaining term equal to the expected term of the option. The Company records any forfeitures in the period that the shares are forfeited. Restricted stock awards are measured at the fair value of the Company's common stock on the date of the grant and recognized over the respective service period. |
Earnings Per Share | Earnings Per Share The Company computes earnings per share in accordance with ASC 260, Earnings Per Share. On October 7, 2022, the Separation was achieved through LGL Group's distribution of 100% of the shares of the Company's common stock to holders of LGL Group's common stock as of the close of business on the record date of September 30, 2022. LGL Group's stockholders of record received one-half share of the Company's common stock for every share of LGL Group's common stock held by them. As a result, on October 7, 2022, the Company had 2.67 million shares of common stock outstanding. This share amount is being utilized for the calculation of basic and diluted earnings per share for all periods presented prior to the Separation. After the Separation, actual outstanding shares are used to calculate both basic and diluted weighted-average number of shares of common stock outstanding. Options representing 9,710 shares were excluded from the below calculation because they would have been anti-dilutive. Years Ended December 31, 2022 2021 Weighted average shares outstanding - basic 2,676,480 2,676,469 Effect of dilutive securities 44 — Weighted average shares outstanding - diluted 2,676,524 2,676,469 |
Income Taxes | Income Taxes The Company accounts for income taxes under the asset and liability method. Under this method, taxes currently payable or refundable are accrued, and deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets are also recognized for realizable operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted income tax rates in effect for the year in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in income tax rates is recognized in the Company’s Consolidated and Combined Statement of Operations in the period that includes the enactment date. A valuation allowance is recorded to reduce the carrying amounts of deferred tax assets if it is more likely than not that such assets will not be realized. The Global Intangible Low-Taxed Income ("GILTI") provisions of the Tax Reform Act, enacted on December 22, 2017, require the Company to include in its U.S. income tax return foreign subsidiary earnings in excess of an allowable return on the foreign subsidiary's tangible assets. An accounting policy election is available to either account for the tax effects of GILTI in the period that is subject to such taxes or to provide deferred taxes for book and tax basis differences that upon reversal may be subject to such taxes. The Company has elected to account for the tax effects of these provisions in the period that is subject to such tax, and the impact was reflected in the Company’s 2022 provision. In determining the Company’s provision for income taxes, the Company considers permanent differences between book and tax income and statutory income tax rates. The Company follows a two-step approach to recognize and measure uncertain tax positions. The first step is to evaluate the tax position for recognition by determining if the available evidence indicates it is more likely than not that the position will be sustained on audit, including resolution of related appeals or litigation processes, if any. The second step is to measure the tax benefit as the largest amount which is more than 50% likely of being realized upon ultimate settlement. The Company considers many factors when evaluating and estimating its tax positions and tax benefits, which may require periodic adjustments and for which actual outcomes may differ from forecasted outcomes. The Company's policy is to include interest and penalties related to uncertain tax positions in income tax expense. Effective for tax years beginning after December 31, 2021, taxpayers are required to capitalize any expenses incurred that are considered incidental to research and experimentation (R&E) activities under IRC Section 174. While taxpayers historically had the option of deducting these expenses under IRC Section 174, the December 2017 Tax Cuts and Jobs Act mandates capitalization and amortization of R&E expenses for tax years beginning after December 31, 2021. Expenses incurred in connection with R&E activities in the US must be amortized over a 5-year period if incurred, and R&E expenses incurred outside the US must be amortized over a 15-year period. R&E activities are broader in scope than qualified research activities that are considered under IRC Section 41 (relating to the research tax credit). The Company includes its tax contingencies accrual, including accrued penalties and interest, in Other Long-term Liabilities on the Consolidated and Combined Balance Sheets unless the liability is expected to be paid within one year. Changes to the tax contingencies accrual, including accrued penalties and interest, are included in Income Tax Provision on the Consolidated and Combined Statements of Operations. |
Concentration Risks | Concentration Risks For the year ended December 31, 2022, the Company's largest customer, the year ended December 31, 2022 , a defense contractor, accounted for $ , or 15.3 %, of the Company's total revenues, compared to $3,138,000 , or 11.8% , of the Company’s total revenues for the year ended December 31, 2021 . A significant portion of the Company's accounts receivable is concentrated with a relatively small number of customers. As of December 31, 2022, four of the Company's largest customers accounted for approximately $2,872,000, or 53.8%, of accounts receivable. As of December 31, 2021, four of the Company's largest customers accounted for approximately $2,568,000, or 62.3%, of accounts receivable. The Company carefully evaluates the creditworthiness of its customers in deciding to extend credit and utilizes letters of credit to further limit credit risk for export sales. As a result of these policies, the Company has experienced very low historical bad debt expense and believes the related risk to be minimal. At various times throughout the year and at December 31, 2022 and 2021, some deposits held at financial institutions were in excess of federally insured limits. The Company has not experienced any losses related to these balances. |
Segment Information | Segment Information The Company reports segment information in accordance with ASC 280, Segment Information |
Impairments of Long-Lived Assets | Impairments of Long-Lived Assets Long-lived assets, including intangible assets subject to amortization, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of the asset may not be recoverable. Long-lived assets are grouped with other assets to the lowest level to which identifiable cash flows are largely independent of the cash flows of other groups of assets and liabilities. Management assesses the recoverability of the carrying cost of the assets based on a review of projected undiscounted cash flows. If an asset is held for sale, management reviews its estimated fair value less cost to sell. Fair value is determined using pertinent market information, including appraisals or broker's estimates, and/or projected discounted cash flows. In the event an impairment loss is identified, it is recognized based on the amount by which the carrying value exceeds the estimated fair value of the long-lived asset. The Company performed an assessment to determine if there were any indicators of impairment as a result of the operating conditions resulting from the coronavirus (“COVID-19”) pandemic at the end of each 2022 fiscal quarter, including at December 31, 2022. The Company concluded that, while there were events and circumstances in the macro-environment that did impact us, we did not experience any entity-specific indicators of asset impairment and no triggering events occurred. |
Financial Instruments | Financial Instruments Cash and cash equivalents, trade accounts receivable, trade accounts payable and accrued expenses are carried at cost which approximates fair value due to the short-term maturity of these instruments. |
Foreign Currency Translation | Foreign Currency Translation The assets and liabilities of international operations are remeasured at the exchange rates in effect at the balance sheet date for monetary assets and liabilities and at historical rates for nonmonetary assets and liabilities, with the related remeasurement gains or losses reported within the consolidated statement of operations. The results of international operations are remeasured at the monthly average exchange rates. The Company's foreign subsidiaries and respective operations' functional currency is the U.S. dollar. The Company has determined this based upon the majority of transactions with customers as well as intercompany transactions and parental support being based in U.S. dollars. The Company has recognized a remeasurement loss of $82,000 and $11,000 in 2022 and 2021, respectively, which is included within other income (expense), net in the Consolidated and Combined Statements of Operations. |
Recently Issued Accounting Pronouncements | Recently Issued Accounting Pronouncements In June 2016, the Financial Accounting Standards Board (“FASB”) issued ASU 2016-13, “ Financial Instruments-Credit Losses: Measurement of Credit Losses on Financial Instruments (ASU 2016-13 model to estimate credit losses for financial assets. The Company adopted the provisions of this standard on January 1, 2023 , with minimal effect on its financial statements. |
Description of Business, Basi_3
Description of Business, Basis of Presentation and Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |
Future Amortization Expense of Finite-Lived Intangible Assets | The estimated aggregate amortization expense for intangible assets, excluding goodwill, for each of the remaining years of the estimated useful life is as follows (in thousands): 2023 $ 54 2024 4 Total $ 58 |
Reconciliation of Basic to Diluted Weighted Average Shares Outstanding | On October 7, 2022, the Separation was achieved through LGL Group's distribution of 100% of the shares of the Company's common stock to holders of LGL Group's common stock as of the close of business on the record date of September 30, 2022. LGL Group's stockholders of record received one-half share of the Company's common stock for every share of LGL Group's common stock held by them. As a result, on October 7, 2022, the Company had 2.67 million shares of common stock outstanding. This share amount is being utilized for the calculation of basic and diluted earnings per share for all periods presented prior to the Separation. After the Separation, actual outstanding shares are used to calculate both basic and diluted weighted-average number of shares of common stock outstanding. Options representing 9,710 shares were excluded from the below calculation because they would have been anti-dilutive. Years Ended December 31, 2022 2021 Weighted average shares outstanding - basic 2,676,480 2,676,469 Effect of dilutive securities 44 — Weighted average shares outstanding - diluted 2,676,524 2,676,469 |
Related Party Transactions (Tab
Related Party Transactions (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
LGL Group, Inc. | |
Related Party Transaction [Line Items] | |
Components of Net Transfers | The following table presents the components of Net Transfers to LGL Group, Inc. in the 2022 and 2021 Consolidated and Combined Statements of Stockholders’ Equity: December 31, 2022 2021 (in thousands) Corporate Expense Allocations $ 325 $ 29 Share-based Compensation Expense 378 292 Assumed Income Tax Payments (644 ) (28 ) Write off Intercompany Balance (4,445 ) — Total Net Transfers to LGL Group $ (4,386 ) $ 293 |
Inventories (Tables)
Inventories (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Inventory Disclosure [Abstract] | |
Schedule of Components of Inventory | The components of inventory as of December 31, 2022 and 2021 are summarized below: December 31, 2022 2021 (in thousands) Raw materials $ 3,335 $ 2,061 Work in process 3,173 2,190 Finished goods 1,010 970 Total Inventories, net $ 7,518 $ 5,221 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Income Tax Disclosure [Abstract] | |
Provision for Income Tax | Income tax provision for the years ended December 31, 2022 and 2021 is as follows: 2022 2021 (in thousands) Current: Federal $ 703 $ — State and local 188 23 Foreign 213 - Total Current 1,104 23 Deferred: Federal (263 ) 455 State and local (78 ) 52 Foreign 34 1 Net deferred (307 ) 508 Income tax provision $ 797 $ 531 |
Reconciliation of Provision for Income Taxes | A reconciliation of the provision for income taxes and the amount computed by applying the statutory federal income tax rate to income before income taxes is detailed below: 2022 2021 (in thousands) Tax provision at expected statutory rate $ 544 $ 444 State taxes, net of federal benefit 91 75 Permanent differences 83 3 Tax credits (61 ) (74 ) Foreign tax expense, and other 161 (12 ) Change in rate — 1 Change in valuation allowance — (374 ) Change in uncertain tax positions — 448 Other (21 ) 20 Provision for income taxes $ 797 $ 531 Effective tax rate 30.7 % 25.1 % |
Tax Effects of Temporary Differences and Carryforwards | Deferred income taxes for 2022 and 2021 were provided for the temporary differences between the financial reporting basis and the income tax basis of the Company's assets and liabilities. Tax effects of temporary differences and carryforwards at December 31, 2022 and 2021 were as follows: December 31, 2022 December 31, 2021 Deferred Tax Deferred Tax Asset Liability Asset Liability (in thousands) Inventory reserve $ 320 $ — $ 334 $ — Fixed assets 471 80 — 44 Other reserves and accruals 181 — 181 — Stock-based compensation 61 — 2 — Other 84 36 — 15 Tax credit carryforwards 50 — 1,343 — Federal tax loss carryforwards — — 204 — State tax loss carryforwards — — 148 — Foreign tax loss carryforwards — — 34 — Total deferred income taxes 1,167 $ 116 2,246 $ 59 Net deferred tax assets $ 1,051 $ 2,187 |
Reconciliation of Unrecognized Tax Benefits | As of December 31, 2022, our unrecognized tax benefits totaled $77,000, and are included within other liabilities in our Consolidated and Combined Balance Sheet. The following table summarizes the activity related to the Company’s unrecognized tax benefits, without interest and penalties: 2022 2021 (in thousands) Balance at January 1 $ 448 $ — Additions for tax positions of prior years — 419 Additions based on tax positions related to the current year 77 29 Transfer to LGL Group, Inc. (448 ) — Balance at December 31 $ 77 $ 448 |
Leases (Tables)
Leases (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Leases [Abstract] | |
Schedule of Future Minimum Payment Under Operating Lease Liabilities | Future minimum lease payment obligations under operating leases are as follows (in thousands): 2022 2023 $ 73 2024 73 2025 12 Total lease payments 158 Less: interest (11 ) Present value of lease payments $ 147 |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | |
Summary of Restricted Stock Activity | The following table provides the Company’s restricted stock activity from the Separation date to December 31, 2022: Number of Shares Weighted Average Grant Date Fair Value Aggregate Grant Date Fair value (in thousands) Unvested Converted Awards as of October 7, 2022 50,329 $ 12.15 $ 611 Vested (3,093 ) 11.64 (36 ) Balance at December 31, 2022 47,236 $ 12.18 $ 575 |
Domestic and Foreign Revenues (
Domestic and Foreign Revenues (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Revenues [Abstract] | |
Significant Foreign Revenues from Operations | Significant foreign revenues from operations (10% or more of foreign sales) were as follows : Years Ended December 31, 2022 2021 (in thousands) Malaysia $ 5,334 $ 2,745 Hong Kong 649 682 All other foreign countries 3,423 2,315 Total foreign revenues $ 9,406 $ 5,742 Total domestic revenues $ 22,439 $ 20,952 The Company allocates its foreign revenue based on the customer's ship-to location . |
Quarterly Financial Data (Una_2
Quarterly Financial Data (Unaudited) (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Quarterly Financial Information Disclosure [Abstract] | |
Summery of Quarterly Financial Data | The following table provides summarized quarterly financial data for 2022: Q1 2022 Q2 2022 Q3 2022 Q4 2022 REVENUES $ 7,691 $ 7,064 $ 8,417 $ 8,673 Costs and expenses: Manufacturing cost of sales 4,819 4,412 5,688 5,580 Engineering, selling and administrative 2,058 2,049 2,099 2,265 OPERATING INCOME 814 603 630 828 Other Expense: Interest expense, net (3 ) (2 ) (1 ) (5 ) Other (expense) income, net (17 ) (9 ) (15 ) (228 ) Total other expense, net (20 ) (11 ) (16 ) (233 ) INCOME BEFORE INCOME TAXES 794 592 614 595 Income tax provision 175 106 111 405 NET INCOME $ 619 $ 486 $ 503 $ 190 Net Income per Basic and Dilutive Share (a) (b) $ 0.23 $ 0.18 $ 0.19 $ 0.07 (a) Due to changes in stock prices during the year and timing of issuances of shares, the cumulative total of quarterly net income per share amounts may not equal the net income per share for the year. (b) For periods prior to the Separation, basic shares at the Separation date are being utilized for the calculation of basic and diluted net income per share. For additional information regarding the basic shares at the Separation date, see Note A. Description of Business, Basis of Presentation and Summary of Significant Accounting Policies, under “Earnings per Share”. The following table provides summarized quarterly financial data for 2021: Q1 2021 Q2 2021 Q3 2021 Q4 2021 REVENUES $ 6,254 $ 6,407 $ 7,173 $ 6,860 Costs and expenses: Manufacturing cost of sales 4,257 3,945 4,636 4,520 Engineering, selling and administrative 1,695 1,669 1,716 2,142 OPERATING INCOME 302 793 821 198 Other Expense: Interest expense, net (3 ) (3 ) (3 ) (3 ) Other (expense) income, net 46 (7 ) (18 ) (10 ) Total other expense, net 43 (10 ) (21 ) (13 ) INCOME BEFORE INCOME TAXES 345 783 800 185 Income tax provision 64 146 162 159 NET INCOME $ 281 $ 637 $ 638 $ 26 Net Income per Basic and Dilutive Share (a) (b) $ 0.10 $ 0.24 $ 0.24 $ 0.01 (a) Due to changes in stock prices during the year and timing of issuances of shares, the cumulative total of quarterly net income per share amounts may not equal the net income per share for the year. For periods prior to the Separation, basic shares at the Separation date are being utilized for the calculation of basic and diluted net income per share. For additional information regarding the basic shares at the Separation date, |
Description of Business, Basi_4
Description of Business, Basis of Presentation and Summary of Significant Accounting Policies - Additional Information (Details) | 3 Months Ended | 12 Months Ended | |||||||||
Oct. 07, 2022 shares | Dec. 31, 2022 USD ($) shares | Sep. 30, 2022 USD ($) | Jun. 30, 2022 USD ($) | Mar. 31, 2022 USD ($) | Dec. 31, 2021 USD ($) shares | Sep. 30, 2021 USD ($) | Jun. 30, 2021 USD ($) | Mar. 31, 2021 USD ($) | Dec. 31, 2022 USD ($) Segment shares | Dec. 31, 2021 USD ($) shares | |
Summary Of Significant Accounting Policies [Line Items] | |||||||||||
Number of Subsidiaries | Segment | 2 | ||||||||||
Conversion of stock description | one-half share of the Company's common stock for every share of LGL Group's common stock | ||||||||||
Depreciation expense | $ 671,000 | $ 488,000 | |||||||||
Intangible assets carrying value | $ 58,000 | $ 112,000 | $ 58,000 | 112,000 | |||||||
Estimated useful life of intangible assets | 10 years | ||||||||||
Goodwill | 40,000 | 40,000 | $ 40,000 | 40,000 | |||||||
Term of warranty | 1 year | ||||||||||
Accrued warranty reserve | $ 95,000 | $ 80,000 | $ 95,000 | 80,000 | |||||||
Research and development costs charged to operations | $ 2,006,000 | $ 2,006,000 | |||||||||
Common stock, shares outstanding (in shares) | shares | 2,670,000 | 2,726,798 | 0 | 2,726,798 | 0 | ||||||
Share-Based Compensation Arrangement by Share-Based Payment Award, Options, Grants in Period, Gross | shares | 9,710 | ||||||||||
Total revenues | $ 8,673,000 | $ 8,417,000 | $ 7,064,000 | $ 7,691,000 | $ 6,860,000 | $ 7,173,000 | $ 6,407,000 | $ 6,254,000 | $ 31,845,000 | $ 26,694,000 | |
Accounts receivable | $ 2,872,000 | $ 2,568,000 | 2,872,000 | 2,568,000 | |||||||
Re-measurement loss | (82,000) | (11,000) | |||||||||
Revenues | Customer Concentration Risk | Commercial Aerospace and Defense Company | |||||||||||
Summary Of Significant Accounting Policies [Line Items] | |||||||||||
Total revenues | $ 8,190,000 | $ 7,838,000 | |||||||||
Concentration risk, percentage | 25.70% | 29.40% | |||||||||
Revenues | Customer Concentration Risk | Defense Contractor | |||||||||||
Summary Of Significant Accounting Policies [Line Items] | |||||||||||
Total revenues | $ 4,857,000 | $ 3,138,000 | |||||||||
Concentration risk, percentage | 15.30% | 11.80% | |||||||||
Accounts Receivable | Customer Concentration Risk | Four Largest Customer | |||||||||||
Summary Of Significant Accounting Policies [Line Items] | |||||||||||
Concentration risk, percentage | 53.80% | 62.30% | |||||||||
ASU 2014-09 | |||||||||||
Summary Of Significant Accounting Policies [Line Items] | |||||||||||
Revenue, performance obligation, description of timing | The Company meets these conditions upon the Company’s satisfaction of the performance obligation, usually at the time of shipment to the customer, because control passes to the customer at that time. Our standard payment terms for customers are net due within 30 days, with a few exceptions, none regularly exceeding 60 days. | ||||||||||
Minimum | ASU 2014-09 | |||||||||||
Summary Of Significant Accounting Policies [Line Items] | |||||||||||
Customer due days | 30 days | ||||||||||
Minimum | Buildings and Improvements | |||||||||||
Summary Of Significant Accounting Policies [Line Items] | |||||||||||
Property, plant and equipment, useful life | 5 years | ||||||||||
Minimum | Other Fixed Assets | |||||||||||
Summary Of Significant Accounting Policies [Line Items] | |||||||||||
Property, plant and equipment, useful life | 3 years | ||||||||||
Maximum | ASU 2014-09 | |||||||||||
Summary Of Significant Accounting Policies [Line Items] | |||||||||||
Customer due days | 60 days | ||||||||||
Maximum | Buildings and Improvements | |||||||||||
Summary Of Significant Accounting Policies [Line Items] | |||||||||||
Property, plant and equipment, useful life | 35 years | ||||||||||
Maximum | Other Fixed Assets | |||||||||||
Summary Of Significant Accounting Policies [Line Items] | |||||||||||
Property, plant and equipment, useful life | 10 years | ||||||||||
LGL Group, Inc. | |||||||||||
Summary Of Significant Accounting Policies [Line Items] | |||||||||||
Percentage of distribution of common shares to former parents stockholders | 100% | ||||||||||
Distribution made to former stockholders date of record | Sep. 30, 2022 | ||||||||||
Ownership interest | 0% | ||||||||||
Conversion of stock description | one-half share of the Company's common stock for every share of LGL Group's common stock held by them. |
Description of Business, Basi_5
Description of Business, Basis of Presentation and Summary of Significant Accounting Policies - Future Amortization Expense of Finite-Lived Intangible Assets (Details) - USD ($) | Dec. 31, 2022 | Dec. 31, 2021 |
Finite-Lived Intangible Assets, Net, Amortization Expense, Fiscal Year Maturity [Abstract] | ||
2023 | $ 54,000 | |
2024 | 4,000 | |
Total | $ 58,000 | $ 112,000 |
Description of Business, Basi_6
Description of Business, Basis of Presentation and Summary of Significant Accounting Policies - Reconciliation of Basic to Diluted Weighted Average Shares Outstanding (Details) - shares | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Weighted Average Number of Shares Outstanding Reconciliation [Abstract] | ||
Weighted average shares outstanding - basic | 2,676,480 | 2,676,469 |
Effect of dilutive securities | 44 | |
Weighted average shares outstanding - diluted | 2,676,524 | 2,676,469 |
Related Party Transactions - Ad
Related Party Transactions - Additional Information (Details) - LGL Group, Inc. - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Related Party Transaction [Line Items] | ||
Allocated corporate expenses | $ 946,000 | $ 921,000 |
Budgeted separation costs | 400,000 | |
Actual separation costs | 838,000 | |
Separation costs excess of budgeted amount | 438,000 | |
Other Expense | ||
Related Party Transaction [Line Items] | ||
Separation costs excess of budgeted amount | $ 219,000 | |
Percentage of Separation costs excess of budgeted amount included in other expense | 50% |
Related Party Transactions - Co
Related Party Transactions - Components of Net Transfers (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Related Party Transaction [Line Items] | ||
Total Net Transfers to LGL Group | $ (309) | $ 1 |
LGL Group, Inc. | ||
Related Party Transaction [Line Items] | ||
Corporate Expense Allocations | 325 | 29 |
Share-based Compensation Expense | 378 | 292 |
Assumed Income Tax Payments | (644) | (28) |
Write off Intercompany Balance | (4,445) | |
Total Net Transfers to LGL Group | $ (4,386) | $ 293 |
Inventories - Additional Inform
Inventories - Additional Information (Details) - USD ($) | Dec. 31, 2022 | Dec. 31, 2021 |
Inventory Disclosure [Abstract] | ||
Reserve for excess and obsolete inventory | $ 1,318,000 | $ 1,381,000 |
Inventories - Schedule of Compo
Inventories - Schedule of Components of Inventory (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Classification of Inventories [Abstract] | ||
Raw materials | $ 3,335 | $ 2,061 |
Work in process | 3,173 | 2,190 |
Finished goods | 1,010 | 970 |
Total Inventories, net | $ 7,518 | $ 5,221 |
Income Taxes - Provision for In
Income Taxes - Provision for Income Tax (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | ||||||||
Dec. 31, 2022 | Sep. 30, 2022 | Jun. 30, 2022 | Mar. 31, 2022 | Dec. 31, 2021 | Sep. 30, 2021 | Jun. 30, 2021 | Mar. 31, 2021 | Dec. 31, 2022 | Dec. 31, 2021 | |
Current: | ||||||||||
Federal | $ 703 | |||||||||
State and local | 188 | $ 23 | ||||||||
Foreign | 213 | |||||||||
Total Current | 1,104 | 23 | ||||||||
Deferred: | ||||||||||
Federal | (263) | 455 | ||||||||
State and local | (78) | 52 | ||||||||
Foreign | 34 | 1 | ||||||||
Net deferred | (307) | 508 | ||||||||
Income tax provision | $ 405 | $ 111 | $ 106 | $ 175 | $ 159 | $ 162 | $ 146 | $ 64 | $ 797 | $ 531 |
Income Taxes - Reconciliation o
Income Taxes - Reconciliation of Provision for Income Taxes (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | ||||||||
Dec. 31, 2022 | Sep. 30, 2022 | Jun. 30, 2022 | Mar. 31, 2022 | Dec. 31, 2021 | Sep. 30, 2021 | Jun. 30, 2021 | Mar. 31, 2021 | Dec. 31, 2022 | Dec. 31, 2021 | |
Reconciliation of Provision (Benefit) for Income Taxes [Abstract] | ||||||||||
Tax provision at expected statutory rate | $ 544 | $ 444 | ||||||||
State taxes, net of federal benefit | 91 | 75 | ||||||||
Permanent differences | 83 | 3 | ||||||||
Tax credits | (61) | (74) | ||||||||
Foreign tax expense, and other | 161 | (12) | ||||||||
Change in rate | 0 | 1 | ||||||||
Change in valuation allowance | 0 | (374) | ||||||||
Change in uncertain tax positions | 0 | 448 | ||||||||
Other | (21) | 20 | ||||||||
Income tax provision | $ 405 | $ 111 | $ 106 | $ 175 | $ 159 | $ 162 | $ 146 | $ 64 | $ 797 | $ 531 |
Effective tax rate | 30.70% | 25.10% |
Income Taxes - Tax Effects of T
Income Taxes - Tax Effects of Temporary Differences and Carryforwards (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Deferred Tax Assets [Abstract] | ||
Inventory reserve | $ 320 | $ 334 |
Fixed assets | 471 | |
Other reserves and accruals | 181 | 181 |
Stock-based compensation | 61 | 2 |
Other | 84 | |
Tax credit carryforwards | 50 | 1,343 |
Federal tax loss carryforwards | 204 | |
State tax loss carryforwards | 148 | |
Foreign tax loss carryforwards | 34 | |
Total deferred income tax assets | 1,167 | 2,246 |
Total deferred income tax liabilities | 116 | 59 |
Net deferred tax assets | 1,051 | 2,187 |
Deferred Tax Liabilities [Abstract] | ||
Fixed assets | 80 | 44 |
Other | 36 | 15 |
Total deferred income tax liabilities | $ 116 | $ 59 |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Income Tax Disclosure [Abstract] | ||
Unrecognized tax benefits | $ 77,000 | $ 448,000 |
Unrecognized tax benefits that would impact effective tax rate | 77,000 | |
Federal and research and development tax credit carryforwards | $ 50,000 | |
Federal and research and development tax credit carryforwards, expiration year | 2027 |
Income Taxes - Reconciliation_2
Income Taxes - Reconciliation of Unrecognized Tax Benefits (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Income Tax Disclosure [Abstract] | ||
Balance at January 1 | $ 448,000 | |
Additions for tax positions of prior years | $ 419,000 | |
Additions based on tax positions related to the current year | 77,000 | 29,000 |
Transfer to LGL Group, Inc. | (448,000) | |
Balance at December 31 | $ 77,000 | $ 448,000 |
Revolving Credit Agreement - Ad
Revolving Credit Agreement - Additional Information (Details) - Revolving Credit Facility - USD ($) | 12 Months Ended | ||
Jun. 15, 2022 | Dec. 31, 2022 | Dec. 31, 2021 | |
Synovus Bank | |||
Line Of Credit Facility [Line Items] | |||
Notes outstanding borrowings amount | $ 0 | ||
Fifth Third Bank | |||
Line Of Credit Facility [Line Items] | |||
Notes outstanding borrowings amount | $ 0 | ||
Revolving line of credit , borrowing limit | $ 5,000,000 | ||
Promissory note maturity date | Jun. 15, 2025 | ||
Fifth Third Bank | Secured Overnight Financing Rate (SOFR) Overnight Index Swap Rate | |||
Line Of Credit Facility [Line Items] | |||
Description of variable rate | Secured Overnight Financing Rate (“SOFR”) plus a margin of 2.25%, with a SOFR floor of 0.00%. | ||
Interest rate | 2.25% | ||
Fifth Third Bank | Secured Overnight Financing Rate (SOFR) Overnight Index Swap Rate | Interest Rate Floor | |||
Line Of Credit Facility [Line Items] | |||
Interest rate | 0% |
Leases - Additional Information
Leases - Additional Information (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Lessee Lease Description [Line Items] | ||
Operating lease, existence of option to extend | true | |
Right-of-use lease assets in exchange for operating lease liabilities | $ 80,000 | |
Lease obligation payable | $ 147,000 | $ 218,000 |
Operating Lease, Liability, Current, Statement of Financial Position [Extensible List] | Other accrued expenses | Other accrued expenses |
Rent expense under operating leases | $ 349,000 | $ 476,000 |
Other accrued expenses | $ 71,000 | $ 73,000 |
Weighted average discount rate | 6.30% | 4.20% |
Weighted average remaining lease term | 2 years | 3 years |
Minimum | ||
Lessee Lease Description [Line Items] | ||
Operating lease renewal term | 1 year | |
Maximum | ||
Lessee Lease Description [Line Items] | ||
Operating lease renewal term | 5 years | |
Leases, initial term | 12 months |
Leases - Schedule of Future Min
Leases - Schedule of Future Minimum Payment Under Operating Lease Liabilities (Details) $ in Thousands | Dec. 31, 2022 USD ($) |
Leases [Abstract] | |
2023 | $ 73 |
2024 | 73 |
2025 | 12 |
Total lease payments | 158 |
Less: interest | (11) |
Present value of lease payments | $ 147 |
Stock-Based Compensation - Addi
Stock-Based Compensation - Additional Information (Details) - USD ($) | 12 Months Ended | |||
Oct. 07, 2022 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 28, 2021 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Conversion of stock, shares converted | 9,710 | |||
Incremental compensation cost related to the adjustment of an outstanding stock option award | $ 20,000 | |||
Share-Based Compensation Arrangement by Share-Based Payment Award, Options, Grants in Period, Gross | 9,710 | |||
Stock Options | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Exercise price of options either at or above market price | 10% | |||
Term of award | 5 years | |||
Vesting period of award | 3 years | |||
Share-based Compensation Expense | $ 458,000 | $ 292,000 | ||
Share-Based Compensation Arrangement by Share-Based Payment Award, Options, Grants in Period, Gross | 0 | |||
Restricted Stock | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Unrecognized compensation expense | $ 316,000 | |||
Unrecognized compensation expense, recognition period | 1 year 7 months 6 days | |||
2022 Incentive Plan | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Number of shares authorized for issuance (in shares) | 500,000 | |||
Number of shares remaining available for future issuance (in shares) | 449,671 | |||
Conversion of stock, shares converted | 60,039 |
Stock-Based Compensation - Summ
Stock-Based Compensation - Summary of Restricted Stock Awards (Details) - Restricted Stock $ / shares in Units, $ in Thousands | 3 Months Ended |
Dec. 31, 2022 USD ($) $ / shares shares | |
Number of Shares Outstanding [Roll Forward] | |
Number of Shares, Unvested Converted Awards, Beginning balance | shares | 50,329 |
Number of Shares, Vested | shares | (3,093) |
Number of Shares, Unvested Converted Awards, Ending balance | shares | 47,236 |
Weighted Average Grant Date Fair Value [Roll Forward] | |
Weighted Average Grant Date Fair Value, Unvested Converted Awards, Beginning balance | $ / shares | $ 12.15 |
Weighted Average Grant Date Fair Value, Vested | $ / shares | 11.64 |
Weighted Average Grant Date Fair Value, Unvested Converted Awards, Ending balance | $ / shares | $ 12.18 |
Aggregate Grant Date Fair value [Roll Forward] | |
Aggregate Grant Date Fair value, Unvested Converted Awards, Beginning balance | $ | $ 611 |
Aggregate Grant Date Fair value, Vested | $ | (36) |
Aggregate Grant Date Fair value, Unvested Converted Awards, Ending balance | $ | $ 575 |
Employee Benefit Plan - Additio
Employee Benefit Plan - Additional Information (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Compensation And Retirement Disclosure [Abstract] | ||
Employer matching contribution, percentage | 50% | |
Employer matching contribution of employees' contribution, percentage | 6% | |
Employer matching contribution amount | $ 89,000 | $ 112,000 |
Annual vesting percentage of employer contributions | 20% | |
Vesting period of employer matching contributions | 6 years | |
Vesting percentage of employer contributions by year six | 100% |
Domestic and Foreign Revenues -
Domestic and Foreign Revenues - Additional Information (Details) | 12 Months Ended |
Dec. 31, 2022 | |
Foreign [Member] | Sales Revenue, Segment [Member] | Customer Concentration Risk | |
Entity Wide Revenue Major Customer [Line Items] | |
Portion of foreign sales | 10% |
Domestic and Foreign Revenues_2
Domestic and Foreign Revenues - Significant Foreign Revenues from Operations (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | ||||||||
Dec. 31, 2022 | Sep. 30, 2022 | Jun. 30, 2022 | Mar. 31, 2022 | Dec. 31, 2021 | Sep. 30, 2021 | Jun. 30, 2021 | Mar. 31, 2021 | Dec. 31, 2022 | Dec. 31, 2021 | |
Entity Wide Revenue Major Customer [Line Items] | ||||||||||
Revenues from operations | $ 8,673 | $ 8,417 | $ 7,064 | $ 7,691 | $ 6,860 | $ 7,173 | $ 6,407 | $ 6,254 | $ 31,845 | $ 26,694 |
Malaysia [Member] | ||||||||||
Entity Wide Revenue Major Customer [Line Items] | ||||||||||
Revenues from operations | 5,334 | 2,745 | ||||||||
Hong Kong [Member] | ||||||||||
Entity Wide Revenue Major Customer [Line Items] | ||||||||||
Revenues from operations | 649 | 682 | ||||||||
All other foreign countries [Member] | ||||||||||
Entity Wide Revenue Major Customer [Line Items] | ||||||||||
Revenues from operations | 3,423 | 2,315 | ||||||||
Foreign [Member] | ||||||||||
Entity Wide Revenue Major Customer [Line Items] | ||||||||||
Revenues from operations | 9,406 | 5,742 | ||||||||
Domestic [Member] | ||||||||||
Entity Wide Revenue Major Customer [Line Items] | ||||||||||
Revenues from operations | $ 22,439 | $ 20,952 |
Quarterly Financial Data (Una_3
Quarterly Financial Data (Unaudited) - Summery of Quarterly Financial Data (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | ||||||||
Dec. 31, 2022 | Sep. 30, 2022 | Jun. 30, 2022 | Mar. 31, 2022 | Dec. 31, 2021 | Sep. 30, 2021 | Jun. 30, 2021 | Mar. 31, 2021 | Dec. 31, 2022 | Dec. 31, 2021 | |
Quarterly Financial Information Disclosure [Abstract] | ||||||||||
REVENUES | $ 8,673 | $ 8,417 | $ 7,064 | $ 7,691 | $ 6,860 | $ 7,173 | $ 6,407 | $ 6,254 | $ 31,845 | $ 26,694 |
Type of Revenue [Extensible List] | us-gaap:ProductMember | us-gaap:ProductMember | us-gaap:ProductMember | us-gaap:ProductMember | us-gaap:ProductMember | us-gaap:ProductMember | us-gaap:ProductMember | us-gaap:ProductMember | us-gaap:ProductMember | us-gaap:ProductMember |
Costs and expenses: | ||||||||||
Manufacturing cost of sales | $ 5,580 | $ 5,688 | $ 4,412 | $ 4,819 | $ 4,520 | $ 4,636 | $ 3,945 | $ 4,257 | $ 20,499 | $ 17,358 |
Engineering, selling and administrative | 2,265 | 2,099 | 2,049 | 2,058 | 2,142 | 1,716 | 1,669 | 1,695 | 8,471 | 7,222 |
OPERATING INCOME | 828 | 630 | 603 | 814 | 198 | 821 | 793 | 302 | 2,875 | 2,114 |
Other Expense: | ||||||||||
Interest expense, net | (5) | (1) | (2) | (3) | (3) | (3) | (3) | (3) | (11) | (12) |
Other (expense) income, net | (228) | (15) | (9) | (17) | (10) | (18) | (7) | 46 | (269) | 11 |
Total other expense, net | (233) | (16) | (11) | (20) | (13) | (21) | (10) | 43 | (280) | (1) |
INCOME BEFORE INCOME TAXES | 595 | 614 | 592 | 794 | 185 | 800 | 783 | 345 | 2,595 | 2,113 |
Income tax provision | 405 | 111 | 106 | 175 | 159 | 162 | 146 | 64 | 797 | 531 |
NET INCOME | $ 190 | $ 503 | $ 486 | $ 619 | $ 26 | $ 638 | $ 637 | $ 281 | $ 1,798 | $ 1,582 |
Net Income per Basic Share | $ 0.07 | $ 0.19 | $ 0.18 | $ 0.23 | $ 0.01 | $ 0.24 | $ 0.24 | $ 0.10 | $ 0.67 | $ 0.59 |
Net income per Dilutive Share | $ 0.05 | $ 0.19 | $ 0.18 | $ 0.23 | $ 0.01 | $ 0.24 | $ 0.24 | $ 0.10 | $ 0.67 | $ 0.59 |