Last month M-tron Industries reported financial results for the first full year since the operation separated from The LGL Group in October 2022. In the year ending December 2023, sales totaled $41.2 million, representing a 29.3% increase over the previous year. Gross margin increased to 40.7%, helping to drive operating income to $4.3 million. Fully diluted earnings per share nearly doubled year-over-year to $1.28. Operations generated $4.41 million in cash flow during the year.
Demand for electronic components for communications and other electronics systems remains strong. M-tron’s order backlog increased 3.6% year-over-year to $47.8 million at the end of December 2023. The development bodes well for continued growth at the top-line. In the last year, the Company experienced growth in the aerospace and defense market in particular. During the earnings conference call at the end of March 2023, management promised to remain vigilant in controlling costs, which should protect profit margins on the Company’s specialized product lines.
Cash resources at the end of December 2023, totaled $3.9 million, more than four times the year ago cash balance. Strong operating cash flows helped drive the Company’s bank balance. The cash resource bodes well for future growth investments. Indeed, M-tron’s return on invested capital was 20.33% compared to an estimated cost of capital near 9.88%. We expect the 10.45% in excess capital to accrue to shareholders over the near few years.
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