The LGL Group, Inc.:
(a) Dismissal of independent registered public accounting
firm
On April 26, 2023, the Audit Committee (the “Committee”) of the
Board of Directors of The LGL Group, Inc. (the “Company”) dismissed
RSM US LLP (“RSM”) as the Company’s independent registered public
accounting firm, effective immediately in anticipation of the
appointment of PKF O’Connor Davies, LLP (“PKF”) as the Company’s
new independent registered public accounting firm as discussed
below. The decision to change the Company’s independent registered
public accounting firm from RSM to PKF was unanimously approved by
the Committee.
The reports of RSM on the consolidated financial statements of
the Company for the fiscal years ended December 31, 2022 and
December 31, 2021 did not contain an adverse opinion or a
disclaimer of opinion and were not qualified or modified as to
uncertainty, audit scope or accounting principles.
During the fiscal years ended December 31, 2022 and December 31,
2021, there were no “disagreements” (as defined in Item
304(a)(1)(iv) of Regulation S-K and the related instructions)
between the Company and RSM on any matter of accounting principles
or practices, financial statement disclosure or auditing scope or
procedure, which disagreements, if not resolved to RSM’s
satisfaction, would have caused RSM to make reference to the
subject matter of the disagreements in its reports on the
consolidated financial statements for such years. During the fiscal
years ended December 31, 2022 and December 31, 2021 and the
subsequent interim period through April 26, 2023, there were no
reportable events of the type described in Item 304(a)(1)(v) of
Regulation S-K.
In accordance with Item 304(a)(3) of Regulation S-K, the Company
provided RSM with a copy of the disclosures contained in Item 4.01
of the Form 8-K to be filed and requested that RSM furnish the
Company with a letter addressed to the Securities and Exchange
Commission stating whether it agrees with the statements contained
herein. A copy of RSM’s letter, dated April 28, 2023, will be filed
as Exhibit 16.1 to the Form 8-K.
The Chairman of the Board of Directors of the Company, Marc
Gabelli, expressed his appreciation for the professionalism
provided by RSM during the past many years. Marc Gabelli also
welcomed PKF and thanked them for taking on the audit
responsibility for LGL.
(b) Appointment of independent registered public accounting
firm
As discussed above, the Committee appointed PKF as the Company’s
new independent registered public accounting firm effective as of
April 26, 2023.
During the Company’s two most recent years ended December 31,
2022 and December 31, 2021, neither the Company nor anyone on its
behalf consulted PKF regarding either: (i) the application of
accounting principles to a specified transaction, either completed
or proposed, or the type of audit opinion that might be rendered on
the Company’s financial statements, and neither a written report
was provided to the Company nor oral advice was provided to the
Company that PKF concluded was an important factor considered by
the Company in reaching a decision as to any accounting, auditing
or financial reporting issue; or (ii) any matter that was either
the subject of a disagreement or reportable event as defined in
Regulation S-K, Item 304(a)(1)(iv) and Item 304(a)(1)(v),
respectively. The Audit Committee has authorized RSM to respond
fully to all inquiries of PKF.
ABOUT THE LGL GROUP, INC.
The LGL Group operates its manufacturing business through our
subsidiary, Precise Time and Frequency, LLC ("PTF"), a globally
positioned producer of industrial Electronic Instruments and
commercial products and services. Founded in 2002, PTF operates
from our design and manufacturing facility in Wakefield,
Massachusetts. In addition, we operated an Electronic Components
segment, M-tron Industries, Inc., until its Spin-off to all
shareholders on October 7, 2022 when MtronPTI became an
independent, publicly traded company trading on the NYSE American
under the stock symbol ”MPTI”. The Separation was achieved through
LGL’s distribution (the “Distribution”) of 100% of the shares of
MtronPTI's common stock to holders of LGL's common stock as of the
close of business on the record date of September 30, 2022. LGL's
stockholders of record received one-half share of MtronPTI's common
stock for every share of LGL's common stock.
The LGL investment business is comprised of various investment
vehicles in which LGL is either shareholder, partner, or has
general partner interests, and through which LGL invests its
capital. The Company seeks to invest available cash and cash
equivalents in liquid investments with a view to enhancing returns
as we continue to assess further acquisitions of, or investments
in, operating businesses broadly. LGL may provide consulting,
advisory, and certain administrative and back-office services to
the investment vehicles in which LGL is invested. LGL core
strengths include identifying and acquiring undervalued assets and
businesses, often through the purchase of securities, increasing
value through management, financial or other operational changes,
and managing complex legal, regulatory or financial issues, which
may include technical, engineering, environmental, zoning,
permitting and licensing issues among others.
As of December 31, 2022, LGL had investments (currently
classified as Cash and Cash Equivalents and Marketable securities)
with a fair value of approximately $38.1 million. The Company
accounts for its Marketable securities under ASC 321 and as such,
its Marketable securities are reported at fair value on its
consolidated balance sheets.
Business Strategy
Across all of our businesses, our success is based on a simple
formula: we seek to find undervalued companies in the Graham &
Dodd tradition, a methodology for valuing companies that primarily
looks for deeply depressed prices. Today, we are a diversified
holding company owning subsidiaries engaged in manufacturing and
investments. Several of our operating businesses started out as
investment positions in debt or equity securities, held directly by
us. Those positions ultimately resulted in control or complete
ownership of the target company. For example, in 2004, we acquired
a controlling interest in PTI which started out as an investment
position and ultimately became an operating subsidiary before the
Spin-off. The acquisition of PTI, like our other operating
subsidiaries, reflects our opportunistic approach to value
creation, through which returns may be obtained by, among other
things, promoting change through minority positions at targeted
companies in our Investment segment or by acquiring control of
those target companies that we believe we could run more profitably
ourselves.
In appropriate circumstances, we or our subsidiaries may become
the buyer of target companies, adding them to our portfolio of
operating subsidiaries, thereby expanding our operations through
such opportunistic acquisitions.
It is our belief that our strategy will continue to produce
strong results into the future.
Our manufacturing business, PTF, employs a market-based approach
of designing and offering new products to our customers through
both organic research and development, and through strategic
partnerships, joint ventures, acquisitions or mergers. We seek to
leverage our core strength as an engineering leader to expand
client access, add new capabilities and continue to diversify our
product offerings. Our focus is on investments that will
differentiate us, broaden our portfolio and lead toward higher
levels of integration organically and through joint venture, merger
and acquisition opportunities. We believe that successful execution
of this strategy will lead to a transformation of our product
portfolio towards multi-component integrated offerings, longer
product life cycles, better margins and improved competitive
position.
A key driver of value is the direct investing business which
utilizes various structures and vehicles to build shareholder
value, including certain Special Purpose Vehicles which may be
syndicated for investment, and involve certain fee generating
activities. The company could act as the financial and management
sponsor, raise capital from external nonaffiliated investors, and
may receive management fees and success-based incentives in
accordance with market practice.
General
The LGL Group, Inc. (the "Company," "LGL," "we," "us," or "our")
is a holding company engaged in services, investment and
manufacturing business activities. Since 1985, the Company has
acquired 32 businesses, sold 11, and spun off 3, culminating with
the spin-off of M-tron Industries, Inc. (“MtronPTI”) in 2022.
The Company was incorporated in 1928 under the laws of the State
of Indiana, and in 2007, the Company was reincorporated under the
laws of the State of Delaware as The LGL Group, Inc. We maintain
our executive offices at 2525 Shader Road, Orlando, Florida 32804.
Our telephone number is (407) 298-2000. Our Internet address is
www.lglgroup.com. Our common stock and warrants are traded on the
NYSE American (“NYSE”) under the symbols "LGL" and “LGL WS”,
respectively.
LGL’s business strategy is primarily focused on growth through
expanding new and existing operations across diversified
industries. The LGL Group Inc.'s engineering and design origins
date back to the early part of the last century. In 1917, Lynch
Glass Machinery Company, the predecessor of LGL, was formed, and
emerged in the late twenties as a successful manufacturer of
glass-forming machinery. The company was then renamed Lynch
Corporation and was incorporated in 1928 under the laws of the
State of Indiana. In 1946, Lynch was listed on the “New York Curb
Exchange,” the predecessor to the NYSE American. The company has
had a long history of owning and operating various businesses in
the precision engineering, manufacturing and services sectors.
Caution Concerning Forward Looking Statements
This press release may contain forward-looking statements made
in reliance upon the safe harbor provisions of Section 27A of the
Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended. Forward-looking
statements include all statements that do not relate solely to
historical or current facts, and can be identified by the use of
words such as “may,” “will,” “expect,” “project,” “estimate,”
“anticipate,” “plan,” “believe,” “potential,” “should,” “continue”
or the negative versions of those words or other comparable words.
These forward-looking statements are not guarantees of future
actions or performance. These forward-looking statements are based
on information currently available to us and our current plans or
expectations and are subject to a number of uncertainties and risks
that could significantly affect current plans, anticipated actions
and our future financial condition and results. Certain of these
risks and uncertainties are described in greater detail in our
filings with the Securities and Exchange Commission. We are under
no obligation to (and expressly disclaim any such obligation to)
update or alter our forward-looking statements, whether as a result
of new information, future events or otherwise.
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version on businesswire.com: https://www.businesswire.com/news/home/20230502005923/en/
The LGL Group, Inc. James Tivy (407) 298-2000
LGL (AMEX:LGL)
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