[10-Q] M-tron Industries, Inc. Quarterly Earnings Report

Rhea-AI Filing Summary

M-tron Industries (MPTI) reported continued top-line growth in the second quarter of 2025 with revenue of $13.3 million, up 12.5% from the prior-year quarter, and $26.0 million for the six months, up 13.1% year-over-year. Growth was driven by continued defense and avionics program shipments, and backlog rose to $61.2 million, a 29.6% increase since December 31, 2024 and 35.0% versus June 30, 2024.

Profitability shows mixed results: GAAP net income was $1.56 million for Q2 (down 10.6%) and $3.19 million for the six months (down 1.2%), with basic EPS of $0.55 and $1.12, respectively. Gross margin contracted to 43.6% in Q2 (down 298 basis points) primarily from higher manufacturing costs tied to new-product production and tariffs. Adjusted EBITDA was $2.42 million for Q2 and $4.92 million for six months. Liquidity is strong with $15.53 million cash, working capital of $27.09 million and no outstanding borrowings on the $5.0 million revolver as of June 30, 2025. The company operates in a single reportable Electronic Components segment and discloses customer concentration and related-party cash invested with GAMCO totaling $13.356 million.

Positive

• Revenue growth: Revenues increased to $13.282M for Q2 (+12.5%) and $26.014M for six months (+13.1%).
• Backlog expansion: Order backlog was $61.199M, up 29.6% from Dec 31, 2024 and 35.0% year-over-year.
• Strong liquidity: Cash and cash equivalents of $15.529M and working capital of $27.091M with no revolver borrowings as of June 30, 2025.
• Adjusted EBITDA resilience: Adjusted EBITDA of $2.419M in Q2 and $4.921M for six months, supporting operating cash generation.

Negative

• Margin compression: Gross margin decreased to 43.6% in Q2 (down ~298 basis points) due to higher initial production costs for new products and tariffs.
• Profit decline in Q2: GAAP net income fell to $1.560M in Q2 (down 10.6% year-over-year); six-month net income modestly declined to $3.190M (down 1.2%).
• Customer concentration: Top two customers represented ~51.4% of Q2 revenues (33.7% and 17.7%), and four customers comprised ~64.3% of gross receivables.
• Related-party cash concentration: $13.356M of cash is invested with GAMCO and is included in cash and cash equivalents, creating concentration of invested cash.
• Financing cost event: $0.297M of warrant-related costs reduced financing cash flows during the period.

Insights

Financial Analyst

TL;DR: Revenue and backlog growth offset by margin compression from new-product costs and tariffs; liquidity and adjusted EBITDA remain supportive.

M-tron shows healthy demand with a 12.5% quarterly revenue increase and a materially larger backlog of $61.2M, which supports near-term revenue visibility. However, gross margin weakness (down ~298 bps in Q2) driven by higher initial production costs for new products and tariff impacts compressed GAAP profitability, producing a Q2 net income decline to $1.56M. Adjusted EBITDA remained solid at $2.42M for Q2 and improved on a six-month basis to $4.92M. Cash of $15.53M and a strong current ratio (6.8x) reduce short-term liquidity concerns, but customer concentration and a large related-party cash balance warrant monitoring for concentration risk. Overall impact: 0.

Corporate Governance Expert

TL;DR: Controls reported effective; disclosures transparent on related-party dealings and executive sign-offs; no material litigation noted.

Management attests the effectiveness of disclosure controls as of June 30, 2025 and cites no material changes to internal control over financial reporting. Related-party activity is disclosed: cash invested with GAMCO ($13.356M) and service payments to LGL Group are explicit. The filing includes required officer certifications and lists exhibits including a warrant agreement. No material legal proceedings or contingencies were recorded. Governance disclosures are complete and clear in this filing. Impact rating: 0.

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

☒         QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2025

OR

☐         TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ____________ to ____________

Commission File No. 001-41391

M-tron Industries, Inc.

(Exact Name of Registrant as Specified in Its Charter)

Delaware	46-0457944
(State or Other Jurisdiction of Incorporation or Organization)	(I.R.S. Employer Identification No.)
2525 Shader Rd., Orlando, Florida	32804
(Address of principal executive offices)	(Zip Code)

(407) 298-2000

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class		Trading Symbol(s)		Name of each exchange on which registered
Common Stock, par value $0.01		MPTI		NYSE American
Warrants to Purchase Shares of Common Stock, Expiring on or before April 25, 2028		MPTI WS		NYSE American

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes  ☒    No  ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes  ☒    No  ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☐		Accelerated filer	☐
Non-accelerated filer	☒		Smaller reporting company	☒
Emerging growth company	☒

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐    No  ☒

As of July 31, 2025, the registrant had 2,923,905 shares of common stock, $0.01 par value per share, outstanding.

Table of Contents

M-tron Industries, Inc.

Form 10-Q for the Period Ended June 30, 2025

Table of Contents

							Page
PART I.		FINANCIAL INFORMATION
Item 1.		Financial Statements (Unaudited)					2
			Condensed Consolidated Statements of Operations				2
			Condensed Consolidated Balance Sheets				3
			Condensed Consolidated Statements of Equity				4
			Condensed Consolidated Statements of Cash Flows				6
			Notes to Condensed Consolidated Financial Statements				7
				1.	Background and Description of Business		7
				2.	Summary of Significant Accounting Policies		7
				3.	Segment Information		9
				4.	Related Party Transactions		10
				5.	Income Taxes		11
				6.	Revolving Credit Agreement		12
				7.	Stock-Based Compensation		12
				8.	Stockholders' Equity		13
				9.	Earnings per Share ("EPS")		13
				10.	Commitments and Contingencies		13
				11.	Other Financial Statement Information		14
				12.	Domestic and Foreign Revenues		14
				13.	Subsequent Events		14
Item 2.		Management’s Discussion and Analysis of Financial Condition and Results of Operations					15
Item 3.		Quantitative and Qualitative Disclosures About Market Risk					20
Item 4.		Controls and Procedures					20
PART II.		OTHER INFORMATION
Item 1.		Legal Proceedings					21
Item 5.		Other Information					21
Item 6.		Exhibits					21
		Signatures

Table of Contents

Cautionary Note Concerning Forward-Looking Statements

Certain statements contained in this Quarterly Report on Form 10-Q of M-tron Industries, Inc. ("Mtron" or the "Company") and the Company's other communications and statements, other than historical facts, may be considered forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). The Company intends for all such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in Section 27A of the Securities Act and Section 21E of the Exchange Act, as applicable by law. Such statements include, in particular, statements about the Company's beliefs, plans, objectives, goals, expectations, estimates, projections and intentions. These statements are subject to significant risks and uncertainties and are subject to change based on various factors, many of which are beyond the Company's control. The words "may," "could," "should," "would," "believe," "anticipate," "estimate," "expect," "intend," "plan," "target," "goal," and similar expressions are intended to identify forward-looking statements. All forward-looking statements, by their nature, are subject to risks and uncertainties. Therefore, such statements are not intended to be a guarantee of the Company's performance in future periods. The Company's actual future results may differ materially from those set forth in the Company's forward-looking statements. For information concerning these factors and related matters, see "Risk Factors" in the Company’s Annual Report on Form 10-K, as filed with the Securities and Exchange Commission ("SEC") on March 27, 2025. However, other factors besides those referenced could adversely affect the Company's results, and you should not consider any such list of factors to be a complete set of all potential risks or uncertainties. Any forward-looking statements made by the Company herein speak as of the date of this Quarterly Report on Form 10-Q. The Company does not undertake to update any forward-looking statement, except as required by law. As a result, you should not place undue reliance on these forward-looking statements.

1

Table of Contents

PART I

FINANCIAL INFORMATION

Item 1. Financial Statements

M-tron Industries, Inc.

Condensed Consolidated Statements of Operations

(Unaudited)

		Three Months Ended June 30,								Six Months Ended June 30,
(in thousands, except share data)		2025				2024				2025				2024
Revenues		$	13,282			$	11,808			$	26,014			$	22,993
Costs and expenses:
Manufacturing cost of sales			7,490				6,307				14,816				12,713
Engineering, selling and administrative			3,948				3,394				7,341				6,384
Total costs and expenses			11,438				9,701				22,157				19,097
Operating income			1,844				2,107				3,857				3,896
Other income (expense):
Interest income, net			124				44				235				76
Other income (expense), net			27				(5	)			17				37
Total other income, net			151				39				252				113
Income before income taxes			1,995				2,146				4,109				4,009
Income tax expense			435				402				919				779
Net income		$	1,560			$	1,744			$	3,190			$	3,230
Income per common share:
Basic		$	0.55			$	0.64			$	1.12			$	1.19
Diluted		$	0.53			$	0.63			$	1.09			$	1.16
Weighted average shares outstanding:
Basic			2,853,383				2,728,599				2,848,419				2,723,293
Diluted			2,934,594				2,779,802				2,931,053				2,783,739

See accompanying Notes to the Condensed Consolidated Financial Statements.

2

Table of Contents

M-tron Industries, Inc.

Condensed Consolidated Balance Sheets

(Unaudited)

(in thousands, except share data)		June 30, 2025				December 31, 2024
Assets:
Current assets:
Cash and cash equivalents		$	15,529			$	12,641
Accounts receivable, net of reserves of $218 and $182, respectively			6,261				6,842
Inventories, net			9,116				9,509
Prepaid expenses and other current assets			874				760
Total current assets			31,780				29,752
Property, plant and equipment, net			5,939				5,061
Right-of-use lease asset			242				9
Intangible assets, net			40				40
Deferred income tax asset			1,691				1,623
Other assets			—				3
Total assets		$	39,692			$	36,488
Liabilities:
Current liabilities:
Accounts payable		$	1,536			$	1,423
Accrued compensation and commissions			2,273				3,235
Other accrued expenses			880				500
Income taxes payable			—				58
Total current liabilities			4,689				5,216
Long-term lease liability			190				—
Total liabilities			4,879				5,216
Commitments and Contingencies (Note 10)
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; 2,923,905 and 2,911,165 shares issued and outstanding as of June 30, 2025 and December 31, 2024, respectively)			28				28
Additional paid-in capital			20,258				19,907
Retained earnings			14,527				11,337
Total stockholders' equity			34,813				31,272
Total liabilities and stockholders' equity		$	39,692			$	36,488

See accompanying Notes to the Condensed Consolidated Financial Statements.

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M-tron Industries, Inc.

Condensed Consolidated Statements of Equity

(Unaudited)

(in thousands)		Preferred Stock				Common Stock				Additional Paid-in Capital				Retained Earnings				Total Equity
Balance at March 31, 2025		$	—			$	28			$	20,156			$	12,967			$	33,151
Net income			—				—				—				1,560				1,560
Stock-based compensation expense			—				—				278				—				278
Exercise of stock options			—				—				121				—				121
Warrant-related costs			—				—				(297	)			—				(297	)
Balance at June 30, 2025		$	—			$	28			$	20,258			$	14,527			$	34,813

(in thousands)		Preferred Stock				Common Stock				Additional Paid-in Capital				Retained Earnings				Total Equity
Balance at March 31, 2024		$	—			$	27			$	16,501			$	5,187			$	21,715
Net income			—				—				—				1,744				1,744
Stock-based compensation expense			—				—				201				—				201
Exercise of stock options			—				—				—				—				—
Warrant-related costs			—				—				—				—				—
Balance at June 30, 2024		$	—			$	27			$	16,702			$	6,931			$	23,660

See accompanying Notes to the Condensed Consolidated Financial Statements.

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M-tron Industries, Inc.

Condensed Consolidated Statements of Equity

(Unaudited)

(in thousands)		Preferred Stock				Common Stock				Additional Paid-in Capital				Retained Earnings				Total Equity
Balance at December 31, 2024		$	—			$	28			$	19,907			$	11,337			$	31,272
Net income			—				—				—				3,190				3,190
Stock-based compensation expense			—				—				527				—				527
Exercise of stock options			—				—				121				—				121
Warrant-related costs			—				—				(297	)			—				(297	)
Balance at June 30, 2025		$	—			$	28			$	20,258			$	14,527			$	34,813

(in thousands)		Preferred Stock				Common Stock				Additional Paid-in Capital				Retained Earnings				Total Equity
Balance at December 31, 2023		$	—			$	27			$	16,167			$	3,701			$	19,895
Net income			—				—				—				3,230				3,230
Stock-based compensation expense			—				—				408				—				408
Exercise of stock options			—				—				127				—				127
Warrant-related costs			—				—				—				—				—
Balance at June 30, 2024		$	—			$	27			$	16,702			$	6,931			$	23,660

See accompanying Notes to the Condensed Consolidated Financial Statements.

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M-tron Industries, Inc.

Condensed Consolidated Statements of Cash Flows

(Unaudited)

		Six Months Ended June 30,
(in thousands, except share data)		2025				2024
Cash flows from operating activities:
Net income		$	3,190			$	3,230
Adjustments to reconcile net income to net cash provided by operating activities:
Noncash revenues, expenses, gains and losses included in income:
Depreciation			520				439
Amortization of finite-lived intangible assets			—				5
Stock-based compensation expense			527				408
Deferred income tax provision			(68	)			(108	)
Changes in operating assets and liabilities:
Decrease (increase) in accounts receivable, net			581				(378	)
Decrease (increase) in inventories, net			393				(457	)
Increase in prepaid expenses and other assets			(111	)			(49	)
(Decrease) increase in accounts payable, accrued compensation and commissions expense and other			(570	)			366
Total adjustments			1,272				226
Net cash provided by operating activities			4,462				3,456
Cash flows from investing activities:
Capital expenditures			(1,398	)			(995	)
Net cash used in investing activities			(1,398	)			(995	)
Cash flows from financing activities:
Proceeds from stock option exercise			121				127
Warrant-related costs			(297	)			—
Net cash (used in) provided by financing activities			(176	)			127
Increase in cash and cash equivalents			2,888				2,588
Cash and cash equivalents at beginning of period			12,641				3,913
Cash and cash equivalents at end of period		$	15,529			$	6,501
Supplemental Disclosure:
Cash paid for interest		$	4			$	5
Cash paid for income taxes		$	957			$	1,275

See accompanying Notes to the Condensed Consolidated Financial Statements.

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M-tron Industries, Inc.

Notes to the Condensed Consolidated Financial Statements (Unaudited)

(Dollar amounts in thousands, unless otherwise stated)

1.     Background and Description of Business

M-tron Industries, Inc. (the "Company," "Mtron," "we," "us," or "our") 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. Mtron’s primary markets are aerospace & defense, avionics, industrials, and space.

Our component-level devices and modules are used extensively in electronic systems for applications in commercial and military defense, aerospace, satellites, down-hole drilling, medical devices, instrumentation, industrial devices and in infrastructure equipment for the telecommunications and network equipment industries. As an engineering-centric company, Mtron provides close support to the customer throughout its products' entire life cycle, including product design, prototyping, production and subsequent product upgrades and maintenance. This collaborative approach has resulted in the development and growth of long-standing business relationships with its blue-chip customer base.

The Company offers a wide range of precision frequency control and spectrum control solutions including: radio frequency, microwave and millimeter wave filters; cavity, crystal, ceramic, lumped element and switched filters; high performance and high frequency oven-controlled crystal oscillators ("OCXO"), integrated phase-locked loops OCXOs, temperature-compensated crystal oscillators, voltage-controlled crystal oscillators, low jitter and harsh environment oscillators; crystal resonators, Integrated Microwave Assemblies ("IMA"); and state-of-the-art solid state power amplifier products.

The Company has manufacturing facilities in Orlando, Florida; Yankton, South Dakota; and Noida, India. The Company also has a sales office in Hong Kong. All of Mtron’s production facilities are International Organization for Standardization ("ISO") 9001:2015 certified (the international standard for creating a quality management system) and Restriction of Hazardous Substances ("RoHS") compliant. In addition, its U.S. production facilities in Orlando and Yankton are International Traffic in Arms Regulations ("ITAR") registered and International Aerospace Quality Group AS9100 Rev D certified and our Yankton production facility is Military Standard ("MIL-STD")-790 certified.

We maintain our executive offices at 2525 Shader Road, Orlando, Florida 32804. Our telephone number is (407) 298-2000. Our Internet address is www.mtron.com. Our common stock and warrants are traded on the NYSE American under the symbols "MPTI" and "MPTI WS", respectively.

2.     Summary of Significant Accounting Policies

During the three and six months ended June 30, 2025, there were no material changes to our significant accounting policies included in our Annual Report on Form 10-K for the year ended  December 31, 2024 (the "2024 Annual Report") filed with the Securities and Exchange Commission (the "SEC") on March 27, 2025. For additional information, refer to Note 2 to the audited Consolidated Financial Statements in the 2024 Annual Report.

Basis of Presentation

These unaudited Condensed Consolidated Financial Statements do not include all disclosures that are normally included in annual financial statements prepared in accordance with accounting principles generally accepted in the United States ("U.S. GAAP") and should be read in conjunction with the audited Consolidated and Combined Financial Statements and the related notes included in the 2024 Annual Report. The consolidated financial information as of  December 31, 2024 included herein has been derived from the audited Consolidated and Combined Financial Statements in the 2024 Annual Report.

In the opinion of management, these Condensed Consolidated Financial Statements contain all adjustments (consisting of normal recurring adjustments, including eliminations of material intercompany accounts and transactions) considered necessary for a fair statement of the results presented herein. Operating results for the three and six months ended June 30, 2025 are not necessarily indicative of the results that may be expected for the full year ending December 31, 2025.

Use of Estimates

The preparation of the Condensed Consolidated Financial Statements in conformity with U.S. 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.

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M-tron Industries, Inc.

Notes to the Condensed Consolidated Financial Statements (Unaudited)

(Dollar amounts in thousands, unless otherwise stated)

Research and Development Costs

Research and development costs are charged to operations as incurred. For the three and six months ended June 30, 2025, research and development costs were approximately $784 and $1,506, respectively. For the three and six months ended June 30, 2024, research and development costs were approximately $682 and $1,315. Such costs are included within Engineering, selling and administrative expenses on the Condensed Consolidated Statements of Operations.

Concentration Risks

For the three months ended June 30, 2025, the Company's largest and second largest customers accounted for $4,476, or 33.7%, and $2,345, or 17.7%, of the Company's Revenues, respectively. For the three months ended June 30, 2024, the Company's largest and second largest customers accounted for $4,452, or 37.7%, and $2,216, or 18.8%, of the Company’s Revenues, respectively.

For the six months ended June 30, 2025, the Company's largest and second largest customers accounted for $8,725, or 33.5%, and $3,681, or 14.2%, of the Company's Revenues, respectively. For the six months ended June 30, 2024, the Company's largest and second largest customers accounted for $9,327, or 40.6%, and $4,419, or 19.2%, of the Company's Revenues, respectively.

A significant portion of the Company's accounts receivable is concentrated with a relatively small number of customers. As of  June 30, 2025, the Company's four largest customers accounted for approximately $4,164, or 64.3%, of gross accounts receivable. As of December 31, 2024, four of the Company's largest customers accounted for approximately $4,648, or 66.2%, of gross accounts receivable. The Company carefully evaluates the creditworthiness of its customers in deciding to extend credit. As a result, the Company has experienced very low historical bad debt expense and believes the related risk to be minimal.

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.

We performed an assessment to determine if there were any indicators of impairment as of  June 30, 2025 and December 31, 2024. We 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.

Accounting Standards Adopted

Segment Reporting

In  November 2023, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2023-07, "Segment Reporting (Topic 280) - Improvements to Reportable Segment Disclosures" ("ASU 2023-07"), to address improvements to reportable segment disclosures. The standard primarily requires the following disclosure on an annual and interim basis: (i) significant segment expenses that are regularly provided to chief operating decision maker ("CODM") and included within each reported measure of segment profit or loss; and (ii) other segment items and description of its composition. The standard also requires current annual disclosures about a reportable segment's profits or losses and assets to be disclosed in interim periods and the title and position of the CODM with an explanation of how the CODM uses the report measure(s) of segment profits or losses in assessing segment performance. The provisions of the standard are effective for public companies for fiscal years beginning after  December 15, 2023, and interim periods within fiscal years beginning after  December 15, 2024, with early adoption permitted. The standard is applied retrospectively to all prior periods presented. The Company adopted ASU 2023-07 in  December 2024. Refer to Note 3 - Segment Information for further information.

Future Application of Accounting Standards

Disaggregation of Income Statement Expenses

In  November 2024, the FASB issued ASU 2024-03, "Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40)" ("ASU 2024-03"). The standard requires certain details for expenses presented on the face of the Consolidated Statements of Operations as well as selling expenses to be presented in the notes to the financial statements on an interim and annual basis. The provisions of the standard are effective for public companies for fiscal years beginning after  December 15, 2026, and interim periods within fiscal years beginning after  December 31, 2027. The amendment can be applied either prospectively or retrospectively, with early adoption permitted. The Company is currently assessing the impact of this standard.

Income Taxes

In December 2023, the FASB issued ASU 2023-09, "Income Taxes (Topic 740) - Improvements to Income Tax Disclosures" ("ASU 2023-09"). The standard requires disaggregated information about a company's effective tax rate reconciliation as well as information on income taxes paid. The provisions of the standard are effective for public companies for fiscal years beginning after December 15, 2024, with early adoption permitted. This standard applies prospectively; however, retrospective application is permitted. We are assessing the impact of this standard.

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M-tron Industries, Inc.

Notes to the Condensed Consolidated Financial Statements (Unaudited)

(Dollar amounts in thousands, unless otherwise stated)

3.     Segment Information

Chief Operating Decision Maker

The Company's chief operating decision maker ("CODM") is the Chief Executive Officer.

Reportable Segments

We report our results of operations consistent with the manner in which the CODM reviews the business to assess performance and allocate resources. As such, we report our results in a single reporting segment: Electronic Components.

The Electronic Components segment derives revenues from sales to customers of wide range of precision frequency control and spectrum control solutions, including, but not limited to, the following:

• filters;

• oscillators;

• crystal resonators; and

• integrated microwave assemblies.

Measure of Segment Profit or Loss and Segment Assets

The accounting policies of the Electronic Components segment are the same as those described in Note 2 – Summary of Significant Accounting Policies.

The CODM assesses the performance of and decides how to allocate resources to the Electronic Components segment based on Segment gross profit (loss) as well as Net income, which is also reported on the Consolidated Statements of Operations as consolidated Net income. The CODM uses Segment gross profit to evaluate to evaluate the manufacturing costs of the Electronic Components segment’s products and to ensure those products are priced appropriately. The CODM uses Segment net income to evaluate income generated from segment assets in deciding whether to reinvest profits into the Electronic Components segment or into other parts of the entity, such as for capital expenditures or acquisitions. Additionally, the CODM uses net income to monitor budget versus actual results as well as in competitive analysis to Mtron's peers. The budget versus actuals and competitive analysis are used in assessing the performance of the Electronic Components segment.

The measure of segment assets is reported on the Consolidated Balance Sheets as consolidated Total assets.

The following table presents Mtron's operations for the Electronic Components segment for the three and six months ended June 30, 2025 and 2024:

		Three Months Ended June 30,								Six Months Ended June 30,
		2025				2024				2025				2024
Revenues		$	13,282			$	11,808			$	26,014			$	22,993
Less:
Cost of goods sold			5,566				5,385				10,787				10,661
Manufacturing expenses			1,924				922				4,029				2,052
Segment gross profit		$	5,792			$	5,501			$	11,198			$	10,280
Less:
Research and development costs			784				682				1,506				1,315
Selling and commissions			1,065				872				2,040				1,656
General and administrative expenses			2,109				1,815				3,779				3,362
Income tax expense			435				402				919				779
Other segment items (a)			(161	)			(14	)			(236	)			(62	)
Segment net income		$	1,560			$	1,744			$	3,190			$	3,230
Reconciliation of Segment gross profit to Consolidated net income
Segment operating expenses, net			(3,948	)			(3,394	)			(7,341	)			(6,384	)
Other income			151				39				252				113
Income tax expense			(435	)			(402	)			(919	)			(779	)
Consolidated net income		$	1,560			$	1,744			$	3,190			$	3,230
Reconciliation of Segment net income to Consolidated net income
Adjustments and reconciling items			—				—				—				—
Consolidated net income		$	1,560			$	1,744			$	3,190			$	3,230

(a)	Other segment items includes the following:
		•	Interest income
		•	Income received under the Amended and Restated Transitional Administrative and Management Services Agreement with LGL Group
		•	Foreign currency gains and losses
		•	Expense reimbursements paid to / received from LGL Group.

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M-tron Industries, Inc.

Notes to the Condensed Co

nsolidated Financial Statements (Unaudited)

(Dollar amounts in thousands, unless otherwise stated)

Other Segment Disclosures

The following tables present other segment information for the Electronic Components segment as of  June 30, 2025 and  December 31, 2024 and for the three and six months ended June 30, 2025 and 2024:

		Three Months Ended June 30,								Six Months Ended June 30,
		2025				2024				2025				2024
Interest income		$	127			$	48			$	242			$	84
Interest expense			(3	)			(4	)			(7	)			(8	)
Depreciation			270				220				520				439
Amortization			—				—				—				5
Other significant non-cash items:
Stock-based compensation			278				201				527				408
Capital expenditures			(812	)			(873	)			(1,398	)			(995	)

		June 30, 2025				December 31, 2024
Total assets		$	39,692			$	36,488

4.     Related Party Transactions

In the normal course of business, the Company enters into various transactions with affiliated companies. Parties are considered to be related if one party has the ability to control or exercise significant influence over the other party in making financial or operating decisions.

The following tables summarize income and expenses from transactions with related parties for the three and six months ended June 30, 2025 and 2024:

		Three Months Ended June 30,
		2025								2024
		Income				Expense				Income				Expense
GAMCO Investors, Inc.		$	127			$	—			$	45			$	—
The LGL Group, Inc.			12				(10	)			12				27
Total		$	139			$	(10	)		$	57			$	27

		Six Months Ended June 30,
		2025								2024
		Income				Expense				Income				Expense
GAMCO Investors, Inc.		$	241			$	—			$	79			$	—
The LGL Group, Inc.			24				16				24				53
Total		$	265			$	16			$	103			$	53

The following table summarizes assets and liabilities with related parties as of  June 30, 2025 and December 31, 2024:

		June 30, 2025								December 31, 2024
		Assets				Liabilities				Assets				Liabilities
GAMCO Investors, Inc.		$	13,356			$	—			$	10,415			$	—
The LGL Group, Inc.			128				—				59				—
Total		$	13,484			$	—			$	10,474			$	—

The material agreements whereby the Company generates revenues and expenses with affiliated entities are discussed below:

Investment Activity with GAMCO Investors, Inc.

Certain balances are held and invested in U.S. Treasury funds managed or advised by GAMCO Investors, Inc. or one of its subsidiaries (collectively, "GAMCO" or the "Fund Manager"), which is related to the Company through certain of our shareholders. For the three and six months ended June 30, 2025, the Company paid the Fund Manager a fund management fee of approximately 8 basis points annually of the asset balances under management. For the three and six months ended June 30, 2024, the Company paid the Fund Manager a fund management fee of approximately 8 basis points annually of the asset balances under management. The fund management fees are not paid directly by the Company and are deducted prior to the fund striking its net asset value ("NAV").

As of  June 30, 2025 and December 31, 2024, the balance with the Fund Manager was $13,356 and $10,415, respectively, all of which was classified within Cash and cash equivalents on the Condensed Consolidated Balance Sheets.

For the three and six months ended June 30, 2025, the Company earned income on its investments with the Fund Manager totaling $127 and $241, respectively, all of which was included in Interest income on the Condensed Consolidated Statements of Operations.

For the three and six months ended June 30, 2024, the Company earned income on its investments with the Fund Manager totaling $45 and $79, respectively, all of which was included in Interest income on the Condensed Consolidated Statements of Operations.

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M-tron Industries, Inc.

Notes to the Condensed Consolidated Financial Statements (Unaudited)

(Dollar amounts in thousands, unless otherwise stated)

Transactions with The LGL Group, Inc.

Transitional Administrative and Management Services Agreement

On October 7, 2022, the separation of the Mtron business from The LGL Group, Inc. ("LGL Group") was completed (the "Separation") 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. 

Mtron and LGL Group entered into an Amended and Restated Transitional Administrative and Management Services Agreement ("Mtron TSA"), which sets out the terms for services to be provided between the two companies post Separation. The current terms result in a net monthly payment of $4 per month from LGL Group to Mtron.

For the three months ended June 30, 2025 and 2024, LGL Group paid the Company $12 under the terms of the Mtron TSA, which were recorded in Other income (expense), net on the Condensed Consolidated Statements of Operations. For the six months ended June 30, 2025 and 2024, LGL Group paid the Company $24 under the terms of the Mtron TSA, which were recorded in Other income (expense), net on the Condensed Consolidated Statements of Operations.

Tax Indemnity and Sharing Agreement

Mtron and LGL Group entered into a Tax Indemnity and Sharing Agreement ("Mtron Tax Agreement"), which sets out the terms for which party would be responsible for taxes imposed on LGL Group if the Distribution, together with certain related transactions, were to fail to qualify as a tax-free transaction under Internal Revenue Code ("IRC") Sections 355 and 368(a)(1)(D) if such failure were the result of actions taken after the Distribution by Mtron or LGL Group.

For the three and six months ended June 30, 2025 and 2024, no taxes related to the Distribution have been recorded in the Condensed Consolidated Financial Statements.

Other Transactions

Mtron and LGL Group agreed to share the salaries and benefits related to certain employees incurred by Mtron and/or LGL Group. For the three months ended June 30, 2025, LGL Group reimbursed the Company $10 of the salaries and benefits of certain employees. For the six months ended June 30, 2025, the Company reimbursed LGL Group $16, respectively, of the salaries and benefits of certain employees.

For the three and six months ended June 30, 2024, the Company reimbursed LGL Group $27 and $53, respectively, of the salaries and benefits of certain employees.

5.     Income Taxes

The Company’s quarterly provision for income taxes is measured using an annual effective tax rate, adjusted for discrete items within the period presented. To determine the annual effective tax rate, the Company estimates both the total income (loss) before income taxes for the full year and the jurisdictions in which that income (loss) is subject to tax. The actual effective tax rate for the full year may differ from these estimates if income (loss) before income taxes is greater than or less than what was estimated or if the allocation of income (loss) to jurisdictions in which it is taxed is different from the estimated allocations.

The effective tax rate for the three months ended June 30, 2025 and 2024 was 21.8% and 18.7%, respectively. The effective tax rate for the six months ended June 30, 2025 and 2024 was 22.4% and 19.4%, respectively. Differences between the Company’s effective income tax rate and the U.S. federal statutory rate of 21.0% are primarily due to the impact of research and development credits, permanent differences, and state taxes.

One Big Beautiful Bill Act

On July 4, 2025, the One Big Beautiful Bill Act ("OBBBA") was enacted. This legislation introduced significant and wide-ranging changes to the U.S. federal tax system. Significant components include restoration of 100% accelerated tax depreciation on qualifying property including expansion to cover qualified production property. Another major aspect includes the return to immediate expensing of domestic research and experimental expenditures ("R&E") which in some cases may include retroactive application back to 2021 for businesses with gross receipts of less than $31 million or accelerated tax deductions of R&E that was previously capitalized for larger businesses. The legislation also reinstates EBITDA-based interest deductions for tax purposes and makes several business tax incentives permanent. Less favorable business provisions include limitations on tax deductions for charitable contributions.

OBBBA modified the U.S. International Tax provisions for Global Intangible Low-Taxed Income ("GILTI"), Foreign-Derived Intangible Income ("FDII"), and the Base-erosion Anti-abuse Tax ("BEAT") effective for tax years starting after December 31, 2025. The tax rate on GILTI, renamed Net CFC Tested Income ("NCTI"), is now 12.6%. The FDII rules, renamed Foreign Derived Deduction Eligible Income ("FDDEI"), now carry a 14% tax rate on FDDEI eligible income. OBBBA increases the BEAT rate from 10% to 10.5%.

The Company is currently assessing the potential impact of this legislation on its future financial position, results of operations, and cash flows. In accordance with U.S. GAAP, the effects will be recognized in the period of enactment.

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M-tron Industries, Inc.

Notes to the Condensed Consolidated Financial Statements (Unaudited)

(Dollar amounts in thousands, unless otherwise stated)

6.     Revolving Credit Agreement

On June 15, 2022, Mtron 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 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, 2026 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.

As of  June 30, 2025 and December 31, 2024, there were no outstanding borrowings under the revolving line of credit with Fifth Third Bank.

7.     Stock-Based Compensation

Under the Company's Amended and Restated 2022 Incentive Plan (the "2022 Plan"), stock-based compensation may be awarded to employees, advisors and members of the Board of Directors. As of  June 30, 2025, 193,916 shares remained available for future issuance under the 2022 Plan.

The following table summarizes stock-based compensation expense, which includes expenses related to awards granted under the 2022 Plan, for the periods indicated:

		Three Months Ended June 30,								Six Months Ended June 30,
		2025				2024				2025				2024
Restricted stock awards		$	181			$	201			$	430			$	408
Stock options			97				—				97				—
Total		$	278			$	201			$	527			$	408

Restricted Stock Awards

The following table summarizes restricted stock awards activity for the six months ended June 30, 2025:

(in thousands, except for share data)		Number of Shares				Weighted Average Grant Date Fair Value				Aggregate Grant Date Fair Value
Balance as of December 31, 2024			70,124			$	22.90			$	1,606
Granted			13,814				39.74				549
Vested			(6,147	)			(30.08	)			(185	)
Canceled			(4,424	)			(11.30	)			(50	)
Balance as of June 30, 2025			73,367			$	21.26			$	1,920

As of  June 30, 2025, there was $1,440 of total unrecognized compensation cost related to unvested shares granted. The cost is expected to be recognized over a weighted-average period of 1.7 years.

Stock Options

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. Option awards are generally granted with an exercise price equal to the market price of the Company's stock on the grant date.

The following table presents the weighted-average assumptions for stock options granted:

		Three Months Ended June 30,								Six Months Ended June 30,
		2025				2024				2025				2024
Expected volatility (a)			74.5	%			—				74.5	%			—
Expected annual dividend yield (b)			0.0	%			—				0.0	%			—
Risk-free interest rate (c)			3.8	%			—				3.8	%			—
Expected term, in years (d)			4.0				—				4.0				—

^(a) Because there is insufficient historical stock price data for the Company over the expected term of the options granted, the expected volatility is based on the implied volatility of the Company's historical stock price data (from date of IPO to grant date) appended with the implied volatility of LGL Group's historical stock price data (pre-IPO stock price through the IPO date) blended with the implied volatility of the Company's peers' stock price data (over the entire expected term).

^(b) The dividend yield is 0.0% as the Company is not expected to pay a dividend.

^(c) The risk-free interest rate is based on the average U.S. Treasury zero-coupon rate over the four days prior to the grant date. We chose the risk-free rate that is commensurate with the length of the remaining performance period as of the grant date and interpolated between the yields of the three-year and five-year rates to determine the yield.

^(d) The expected term is the simple average of the vesting period (3 years) and the contractual term (5 years).

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M-tron Industries, Inc.

Notes to the Condensed Consolidated Financial Statements (Unaudited)

(Dollar amounts in thousands, unless otherwise stated)

The following table provides a rollforward of stock option activity for the six months ended June 30, 2025:

(in thousands, except for share data)		Number of Options Outstanding				Weighted Average Exercise Price				Weighted Average Grant Date Fair Value				Weighted Average Remaining Term (in years)				Aggregate Intrinsic Value
Outstanding and exercisable as of December 31, 2024			98,014			$	36.06			$	10.98				2.0			$	1,212
Granted			47,500				40.32				23.31
Exercised			(3,350	)			(36.06	)			(10.98	)
Forfeited			(550	)			(36.06	)			(10.98	)
Outstanding as of June 30, 2025			141,614			$	37.49			$	15.12				2.6			$	639
Exercisable as of June 30, 2025			94,114			$	36.06			$	10.98				1.5			$	559

8.     Stockholders' Equity

Shares Outstanding

The following table presents a rollforward of outstanding shares for the periods indicated:

		Six Months Ended June 30, 2025												Year Ended December 31, 2024
		Common Stock Issued				Held in Treasury				Common Stock Outstanding				Common Stock Issued				Held in Treasury				Common Stock Outstanding
Shares, beginning of period			2,911,165				—				2,911,165				2,786,321				—				2,786,321
Stock-based compensation			13,814				—				13,814				32,548				—				32,548
Exercise of stock options			3,350				—				3,350				92,296				—				92,296
Restricted shares forfeited			(4,424	)			—				(4,424	)			—				—				—
Shares, end of period			2,923,905				—				2,923,905				2,911,165				—				2,911,165

9.     Earnings per Share ("EPS")

The following table presents a reconciliation of Net income and shares used in calculating basic and diluted net income per common share for the periods indicated:

		Three Months Ended June 30,								Six Months Ended June 30,
(in thousands, except share data)		2025				2024				2025				2024
Numerator for EPS:
Net income		$	1,560			$	1,744			$	3,190			$	3,230
Denominator for EPS:
Weighted average shares outstanding - basic			2,853,383				2,728,599				2,848,419				2,723,293
Dilutive effects (a):
Stock options			24,550				—				25,511				107
Restricted stock			56,661				51,203				57,123				60,339
Weighted average shares outstanding - diluted			2,934,594				2,779,802				2,931,053				2,783,739
Income per common share:
Basic		$	0.55			$	0.64			$	1.12			$	1.19
Diluted		$	0.53			$	0.63			$	1.09			$	1.16

^(a) For the three and six months ended June 30, 2025, weighted average shares used for calculating earnings per share excludes warrants to purchase 582,233 shares of common stock as the inclusion of this instrument would be antidilutive to the earnings per share calculations.

10.     Commitments and Contingencies

In the ordinary 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 has no legal accrual for contingencies as of June 30, 2025.

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M-tron Industries, Inc.

Notes to the Condensed Consolidated Financial Statements (Unaudited)

(Dollar amounts in thousands, unless otherwise stated)

11.     Other Financial Statement Information

Inventories, Net

Inventories are valued at the lower of cost or net realizable value using the first-in, first-out ("FIFO") method. 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 components of inventory as of  June 30, 2025 and December 31, 2024 are summarized below:

		June 30, 2025				December 31, 2024
Raw materials		$	4,365			$	4,349
Work in process			4,599				4,876
Finished goods			1,737				1,720
Total gross inventory			10,701				10,945
Reserve for excess and obsolete inventory			(1,585	)			(1,436	)
Inventories, net		$	9,116			$	9,509

Property, Plant and Equipment, Net

The components of property, plant and equipment as of  June 30, 2025 and December 31, 2024 are summarized below:

		June 30, 2025				December 31, 2024
Land		$	536			$	536
Buildings and improvements			5,570				5,496
Machinery and equipment			22,988				21,664
Gross property, plant and equipment			29,094				27,696
Less: Accumulated depreciation			(23,155	)			(22,635	)
Property, plant and equipment, net		$	5,939			$	5,061

12.     Domestic and Foreign Revenues

Significant foreign revenues from operations (10% or more of foreign sales) for the three and six months ended June 30, 2025 and 2024 were as follows:

		Three Months Ended June 30,								Six Months Ended June 30,
		2025				2024				2025				2024
Malaysia		$	1,471			$	1,426			$	2,730			$	2,308
Australia			1,140				645				1,203				1,419
Greece			292				—				537				388
All other foreign countries			846				712				1,668				1,338
Total foreign revenues		$	3,749			$	2,783			$	6,138			$	5,453
Total domestic revenues		$	9,533			$	9,025			$	19,876			$	17,540

The Company allocates its foreign revenue based on the customer's ship-to location.

13.     Subsequent Events

The Company has evaluated events and transactions that occurred after the balance sheet date through the date that the consolidated financial statements were issued. Based upon this review, the Company did not identify any subsequent events that would have required adjustment or disclosure in the consolidated financial statements.

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion and analysis of the Company's financial condition and results of operations should be read in conjunction with the accompanying unaudited Condensed Consolidated Financial Statements, the notes thereto and the other unaudited financial data included in this Quarterly Report on Form 10-Q. The following discussion should also be read in conjunction with the audited Consolidated and Combined Financial Statements and the notes thereto, and "Management's Discussion and Analysis of Financial Condition and Results of Operations" included in our Annual Report on Form 10-K, as filed with the Securities and Exchange Commission (the "SEC") on March 27, 2025. The terms the "Company," "Mtron," "MPTI," "we," "our" or "us" refer to M-tron Industries, Inc. and unless otherwise defined herein, capitalized terms used herein shall have the same meanings as set forth in our Condensed Consolidated Financial Statements and the notes thereto.

Unless otherwise stated, all dollar amounts are in thousands.

In addition to historical data, this discussion contains forward-looking statements about our business, operations and financial performance based on current expectations that involve risks, uncertainties and assumptions. Actual results may differ materially from those discussed in the forward-looking statements as a result of various factors. See the Cautionary Note Concerning Forward-Looking Statements included in this Quarterly Report on Form 10-Q.

Overview

Mtron 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. Mtron’s primary markets are aerospace & defense, avionics, industrials, and space.

The accompanying unaudited Condensed Consolidated Financial Statements include the accounts of the Company and all of its majority-owned subsidiaries.

Trends and Uncertainties

We are not aware of any material trends or uncertainties, other than national economic conditions affecting our industry generally, that may reasonably be expected to have a material impact, favorable or unfavorable, on our revenues or income other than the one listed below and the risk factors disclosed in our Annual Report on Form 10-K, as filed with the SEC on March 27, 2025.

Tariffs

In the first half of 2025, the current U.S. federal administration imposed tariffs on certain products and materials imported into the United States from its trading partners. Additionally, foreign governments have imposed retaliatory tariffs on products and materials exported from the United States. These actions have resulted in market volatility and uncertainty regarding the ultimate effect of the tariffs on global economic conditions, and could further impact the global market for defense, avionics, and other commercial goods. The increase in tariffs have caused an increase in Manufacturing cost of sales, but based on preliminary analysis, we do not anticipate that the tariffs will have a material impact on our operations. The Company is pursuing various avenues to reduce the potential impact, including seeking exemptions and evaluating alternative sources of materials. Based on current conditions, tariffs incurred to date have not had a material impact on our results, but we will continue to monitor developments and assess potential implications as trade policies evolve.

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Results of Operations

Three months ended June 30, 2025 compared to three months ended June 30, 2024

The following table presents our Condensed Consolidated Statements of Operations for the periods indicated:

		Three Months Ended June 30,
(in thousands)		2025				2024				$ Change				% Change
Revenues		$	13,282			$	11,808			$	1,474				12.5	%
Costs and expenses:
Manufacturing cost of sales			7,490				6,307				1,183				18.8	%
Engineering, selling and administrative			3,948				3,394				554				16.3	%
Total costs and expenses			11,438				9,701				1,737				17.9	%
Operating income			1,844				2,107				(263	)			-12.5	%
Other income (expense):
Interest income, net			124				44				80				181.8	%
Other income (expense), net			27				(5	)			32				640.0	%
Total other income, net			151				39				112				287.2	%
Income before income taxes			1,995				2,146				(151	)			-7.0	%
Income tax expense			435				402				33				8.2	%
Net income		$	1,560			$	1,744			$	(184	)			-10.6	%

Total Revenues

Total revenues increased $1,474, or 12.5%, from $11,808 for the three months ended June 30, 2024 to $13,282 for the three months ended June 30, 2025 primarily due to continued strong defense program product and solution shipments.

Total Costs and Expenses

Total costs and expenses increased $1,737, or 17.9%, from $9,701 for the three months ended June 30, 2024 to $11,438 for the three months ended June 30, 2025. The following items contributed to the overall increase:

• a $1,183, or 18.8%, increase in Manufacturing cost of sales from $6,307 for the three months ended June 30, 2024 to $7,490 for the three months ended June 30, 2025 primarily due to the increase in production of several new products, which result in higher initial manufacturing costs, as well as the impact of tariffs; and

• a $554, or 16.3%, increase in Engineering, selling and administrative from $3,394 for the three months ended June 30, 2024 to $3,948 for the three months ended June 30, 2025 from higher research and development investment, higher sales commissions related to an increase in revenues, and an increase in administrative and corporate expenses consistent with the overall growth in the business.

Gross Margin

Gross margin (Revenues less Manufacturing cost of sales as a percentage of Revenues) decreased 298 basis points from 46.6% for the three months ended June 30, 2024 to 43.6% for the three months ended June 30, 2025 reflecting higher revenues partially offset by product mix and the impact of tariffs.

Total Other Income, Net

Total Other income, net increased $112, or 287.2%, from $39 for the three months ended June 30, 2024 to $151 for the three months ended June 30, 2025. The increase was primarily due to a $80, or 181.8%, increase in Interest income (expense), net from $44 for the three months ended June 30, 2024 to $124 for the three months ended June 30, 2025 from higher interest income earned on investments in money market mutual funds.

Income Tax Expense

Income tax expense increased $33, or 8.2%, from $402 for the three months ended June 30, 2024 to $435 for the three months ended June 30, 2025 primarily due to the increase in Income before income taxes driven by the increase in revenues discussed above.

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Six months ended June 30, 2025 compared to six months ended June 30, 2024

The following table presents our Condensed Consolidated Statements of Operations for the periods indicated:

		Six Months Ended June 30,
(in thousands)		2025				2024				$ Change				% Change
Revenues		$	26,014			$	22,993			$	3,021				13.1	%
Costs and expenses:
Manufacturing cost of sales			14,816				12,713				2,103				16.5	%
Engineering, selling and administrative			7,341				6,384				957				15.0	%
Total costs and expenses			22,157				19,097				3,060				16.0	%
Operating income			3,857				3,896				(39	)			-1.0	%
Other income (expense):
Interest income, net			235				76				159				209.2	%
Other income, net			17				37				(20	)			-54.1	%
Total other income, net			252				113				139				123.0	%
Income before income taxes			4,109				4,009				100				2.5	%
Income tax expense			919				779				140				18.0	%
Net income		$	3,190			$	3,230			$	(40	)			-1.2	%

Total Revenues

Total revenues increased $3,021, or 13.1%, from $22,993 for the six months ended June 30, 2024 to $26,014 for the six months ended June 30, 2025 primarily due to continued strong defense program product and solution shipments.

Total Costs and Expenses

Total costs and expenses increased $3,060, or 16.0%, from $19,097 for the six months ended June 30, 2024 to $22,157 for the six months ended June 30, 2025. The following items contributed to the overall increase:

• a $2,103, or 16.5%, increase in Manufacturing cost of sales from $12,713 for the six months ended June 30, 2024 to $14,816 for the six months ended June 30, 2025 primarily due to the increase in production of several new products, which result in higher initial manufacturing costs as well as the impact of tariffs; and

• a $957, or 15.0%, increase in Engineering, selling and administrative from $6,384 for the six months ended June 30, 2024 to $7,341 for the six months ended June 30, 2025 from higher research and development investment, higher sales commissions related to an increase in revenues, and an increase in administrative and corporate expenses consistent with the overall growth in the business.

Gross Margin

Gross margin (Revenues less Manufacturing cost of sales as a percentage of Revenues) decreased 166 basis points from 44.7% for the six months ended June 30, 2024 to 43.0% for the six months ended June 30, 2025 reflecting higher revenue partially offset by product mix and the impact of tariffs.

Total Other Income (Expense), Net

Total Other income (expense), net increased $139, or 123.0%, from $113 for the six months ended June 30, 2024 to $252 for the six months ended June 30, 2025. The following items contributed to the overall increase:

• a $159, or 209.2%, increase in Interest income (expense), net from $76 for the six months ended June 30, 2024 to $235 for the six months ended June 30, 2025 primarily due to interest income earned on investments in money market mutual funds; and

• a $20, or 54.1%, decrease in Other income (expense), net from $37 for the six months ended June 30, 2024 to $17 for the six months ended June 30, 2025 primarily due to unfavorable currency movements.

Income Tax Expense

Income tax expense increased $140, or 18.0%, from $779 for the six months ended June 30, 2024 to $919 for the six months ended June 30, 2025 primarily due to the increase in Income before income taxes driven by the increase in revenues discussed above.

Backlog

As of June 30, 2025, our order backlog was $61,199, an increase of $13,960, or 29.6%, from $47,239 as of December 31, 2024 and a increase of $15,877, or 35.0%, from $45,322 as of June 30, 2024. The increase in backlog from December 31, 2024 reflects the continued strength of our aerospace & defense and avionics customer orders.

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Non-GAAP Financial Measures

To supplement our Condensed Consolidated Financial Statements presented on a GAAP basis, the Company presents its financial condition and results of operations in the way it believes will be most meaningful and representative of its business results. Some of the measurements the Company uses are "Non-GAAP financial measures" under SEC rules and regulations. The non-GAAP financial measures the Company presents are listed below and may not be comparable to similarly-named measures reported by other companies. The presentation of this additional information is not meant to be considered in isolation or as a substitute for net earnings or diluted earnings per share prepared in accordance with GAAP.

The Company uses the following operating performance measure because the Company believes it provides both management and investors with a more complete understanding of the underlying operational results and trends and our marketplace performance:

Adjusted Earnings Before Interest, Taxes, Depreciation, and Amortization ("EBITDA") is derived by excluding the items set forth below from Income before income taxes. Excluded items include the following:

• Interest income

• Interest expense

• Depreciation

• Amortization

• Non-cash stock-based compensation

• Other discrete items that might have a significant impact on comparable GAAP measures and could distort the evaluation of our normal operating performance.

Reconciliation of GAAP Income Before Income Taxes to Non-GAAP Adjusted EBITDA

The following table presents a reconciliation of income before income taxes to Adjusted EBITDA, a non-GAAP measure:

		Three Months Ended June 30,								Six Months Ended June 30,
(in thousands, except share data)		2025				2024				2025				2024
Income before income taxes		$	1,995			$	2,146			$	4,109			$	4,009
Adjustments:
Interest income			(124	)			(44	)			(235	)			(76	)
Depreciation			270				220				520				439
Amortization			—				—				—				5
Total adjustments			146				176				285				368
EBITDA			2,141				2,322				4,394				4,377
Non-cash stock compensation			278				201				527				408
Adjusted EBITDA		$	2,419			$	2,523			$	4,921			$	4,785

Three months ended June 30, 2025 compared to three months ended June 30, 2024

Adjusted EBITDA decreased $104 from $2,523 for the three months ended June 30, 2024 to $2,419 for the three months ended June 30, 2025 primarily due to lower gross margins discussed above and higher interest income partially offset by higher depreciation and higher stock-based compensation.

Six months ended June 30, 2025 compared to six months ended June 30, 2024

Adjusted EBITDA increased $136 from $4,785 for the six months ended June 30, 2024 to $4,921 for the six months ended June 30, 2025 primarily due to higher revenues; higher depreciation; and higher stock-based compensation partially offset by higher interest income.

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Liquidity and Capital Resources

Overview

Liquidity refers to our ability to access sufficient sources of cash to meet the requirements of our operating, investing and financing activities.

Capital refers to our long-term financial resources available to support business operations and future growth.

Our ability to generate and maintain sufficient liquidity and capital depends on the profitability of the business, timing of cash flows, general economic conditions and access to the capital markets and the other sources of liquidity and capital described herein.

As of June 30, 2025 and December 31, 2024, Cash and cash equivalents were $15,529 and $12,641, respectively.

Cash Flow Activity

The following table presents the cash flow activity for the periods indicated:

		As of June 30,
(in thousands)		2025				2024
Cash and cash equivalents, beginning of period		$	12,641			$	3,913
Cash provided by operating activities			4,462				3,456
Cash used in investing activities			(1,398	)			(995	)
Cash (used in) provided by financing activities			(176	)			127
Net change in cash and cash equivalents			2,888				2,588
Cash and cash equivalents, end of period		$	15,529			$	6,501

Operating Activities

Cash provided by operating activities was $4,462 for the six months ended June 30, 2025 compared to cash provided by operating activities of $3,456 for the six months ended June 30, 2024, an increase of $1,006, primarily due to the following:

• Stock-based compensation increased $119 from $408 for the six months ended June 30, 2024 to $527 for the six months ended June 30, 2025.

• Net change in operating assets and liabilities increased $811 from ($518) for the six months ended June 30, 2024 to $293 for the six months ended June 30, 2025.

Our working capital metrics and ratios were as follows:

(in thousands)		June 30, 2025				December 31, 2024
Current assets		$	31,780			$	29,752
Less: Current liabilities			4,689				5,216
Working capital		$	27,091			$	24,536
Current ratio			6.8				5.7

Management continues to focus on efficiently managing working capital requirements to match operating activity levels and will seek to deploy the Company’s working capital where it will generate the greatest returns.

Investing Activities

Cash used in investing activities was $1,398 for the six months ended June 30, 2025 compared to cash used in investing activities of $995 for the six months ended June 30, 2024, an increase of $403, primarily due to the purchase of equipment to support growth, next generation product development, and operational efficiencies during the six months ended June 30, 2025.

Financing Activities

Cash used in financing activities was $176 for the six months ended June 30, 2025 compared to cash provided by financing activities of $127 for the six months ended June 30, 2024, a decrease of $303, primarily due to costs incurred related to the issuance of warrants in April 2025.

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Capital Resources

We believe that existing cash and cash equivalents, marketable securities and cash generated from operations will provide sufficient liquidity to meet our ongoing working capital and capital expenditure requirements for the next 12 months from the date of this filing. At various times throughout the year and as of June 30, 2025 and December 31, 2024, some deposits held at financial institutions were in excess of federally insured limits. The Company has not experienced any losses related to these balances.

Our Board of Directors has adhered to a practice of not paying cash dividends. This policy takes into account our long-term growth objectives, including our anticipated investments for organic growth, potential acquisitions and stockholders' desire for capital appreciation of their holdings.

Revolving Line of Credit

On June 15, 2022, the Company 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 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, 2026 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 are secured by a continuing and unconditional first priority security interest in and to any and all property of the Company.

As of June 30, 2025 and December 31, 2024, there were no outstanding borrowings under the revolving line of credit with Fifth Third Bank.

Critical Accounting Estimates

The preparation of financial statements in conformity with U.S. GAAP requires management to adopt accounting policies related to estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period, as well as the related disclosure of contingent assets and liabilities at the date of the financial statements. On an ongoing basis, management evaluates its accounting policies, estimates and judgments, including those related to income taxes and inventories. Management bases its estimates and judgments on historical experience and various other factors that are believed to be reasonable under the circumstances. Actual results may differ from these estimates.

There have been no material changes to the critical accounting estimates disclosed in our Annual Report on Form 10-K, as filed with the SEC on March 27, 2025.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

Not applicable.

Item 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures 

We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in our reports under the Securities Exchange Act of 1934, as amended (the "Exchange Act") is recorded, processed, summarized and reported within the time periods specified in the rules and forms, and that such information is accumulated and communicated to us, including our Principal Executive Officer and Principal Financial Officer, as appropriate, to allow timely decisions regarding required disclosure. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

As required by Rules 13a-15(b) and 15d-15(b) of the Exchange Act, an evaluation as of June 30, 2025 was conducted under the supervision and with the participation of our management, including our Principal Executive Officer and Principal Financial Officer, of the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act). Based on this evaluation, our Principal Executive Officer and Principal Financial Officer concluded that our disclosure controls and procedures, as of June 30, 2025, were effective.

Changes in Internal Control Over Financial Reporting

There were no changes in the Company’s internal control over financial reporting during the quarter ended June 30, 2025 that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

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PART II

OTHER INFORMATION

Item 1. Legal Proceedings

In the ordinary course of business, we may become subject to litigation or claims. We are not aware of any material pending legal proceedings, other than ordinary routine litigation incidental to our business, to which we or any of our subsidiaries are a party or to which our or their properties are subject.

Item 5. Other Information

During the three months ended June 30, 2025, none of our directors or officers, as defined in Section 16 of the Exchange Act, adopted or terminated a "Rule 10b5-1 trading arrangement" or a "non-Rule 10b5-1 trading arrangement," as each term is defined in Item 408 of Regulation S-K of the Exchange Act.

Item 6. Exhibits

The following exhibits are included, or incorporated by reference, in this Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2025 (and are numbered in accordance with Item 601 of Regulation S-K):

Incorporated by Reference

Exhibit No.

Description

Form

File No.

Exhibit

Filing Date

Filed Herewith

2.

Plan of Acquisition, Reorganization, Arrangement, Liquidation or Succession.

2.1

Amended and Restated Separation and Distribution Agreement by and between The LGL Group, Inc. and M-tron Industries, Inc.

10

001-41391

2.1

August 19, 2022

3.

Articles of Incorporation and Bylaws.

3.1

Amended and Restated Certificate of Incorporation of M-tron Industries, Inc.

10

001-41391

3.1

August 3, 2022

3.2

Amended and Restated Bylaws of M-tron Industries, Inc.

10

001-41391

3.2

August 3, 2022

4.

Instruments Defining the Rights of Security Holders.

4.1

Warrant Agreement, dated as of April 25, 2025, by and among M-tron Industries, Inc., Computershare Inc., and Computershare Trust Company, N.A.

10-Q

001-41391

4.1

May 13, 2025

31.1

Certification of the Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

X

31.2

Certification of the Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

X

32.1

Certification of the Principal Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.*

X

32.2

Certification of the Principal Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.*

X

101.INS

Inline XBRL Instance Document – the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.

X

101.SCH

Inline XBRL Taxonomy Extension Schema Document

X

101.CAL

Inline XBRL Taxonomy Extension Calculation Linkbase Document

X

101.DEF

Inline XBRL Taxonomy Extension Definition Linkbase Document

X

101.LAB

Inline XBRL Taxonomy Extension Label Linkbase Document

X

101.PRE

Inline XBRL Taxonomy Extension Presentation Linkbase Document

X

104

The cover page for the Company’s Quarterly Report on Form 10-Q has been formatted in Inline XBRL and contained in Exhibit 101

X

* In accordance with Item 601(b)(32) of Regulation S-K, this Exhibit is not deemed "filed" for purposes of Section 18 of the Exchange Act or otherwise subject to the liabilities of that section. Such certifications will not be deemed incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Exchange Act, except to the extent that the registrant specifically incorporates it by reference.

21

Table of Contents

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

		M-TRON INDUSTRIES, INC.
		(Registrant)
Date:          August 12, 2025		By:	/s/ Cameron Pforr
			Cameron Pforr
			Interim Chief Executive Officer (Principal Executive Officer)
Date:          August 12, 2025		By:	/s/ Cameron Pforr
			Cameron Pforr
			Chief Financial Officer (Principal Financial Officer)

22

FAQ

What were M-tron (MPTI) revenues for Q2 2025 and the six months ended June 30, 2025?

M-tron reported $13.282 million in revenues for Q2 2025 and $26.014 million for the six months ended June 30, 2025.

How profitable was M-tron (MPTI) in Q2 2025?

GAAP net income for Q2 2025 was $1.560 million (basic EPS $0.55), down 10.6% versus Q2 2024.

What is M-tron’s (MPTI) cash and liquidity position?

As of June 30, 2025, cash and cash equivalents were $15.529 million, working capital $27.091 million, and there were no borrowings on the $5.0M revolver.

Has M-tron (MPTI) disclosed any concentrate customer risk?

Yes. For Q2 2025 the largest customer accounted for 33.7% and the second largest 17.7% of revenues; four customers were ~64.3% of gross receivables.

What drove the margin decline at M-tron (MPTI)?

Management attributes the gross margin decline to higher initial manufacturing costs for new products and the impact of tariffs.