MPTI 10-K & 10-Q changes, risk factors and insider trading
M-tron Industries, Inc. · NYSE · Electronic Components, Nec · CIK 1902314 · All filings on SEC.gov
At a glance
What changed in the latest 10-K
Risk Factors
New heading “A significant portion of our revenue is derived from customers in the aerospace and defense industry, and our business could be adversely affected by changes in government spending or procurement policies.”
New heading “Changes in U.S. trade policies, including the imposition of tariffs and retaliatory tariffs, may adversely impact our business, financial condition, and results of operations.”
Removed heading “LGL Group continues to perform functions for us, and we continue to perform functions for LGL Group, on a transitional basis, and as a result we may experience operational disruptions and incur significant costs to perform these functions ourselves following the transition period or be subject to claims and liability.”
Removed heading “We are subject to significant restrictions on our actions in order to avoid triggering significant tax-related liabilities.”
Largest changes
“We are subject to the trade policies, export/import controls, and other rules and regulations, including tariffs, trade sanctions, and license requirements of the U.S. and other government authorities. During the first Trump Administration from 2017 to 2021, certain tariffs and retaliatory tariffs, as well as other trade restrictions, were imposed on various products and materials. In 2025, President Trump again imposed tariffs and retaliatory tariffs against U.S. …”see in full comparison
“Changes in U.S. trade policies, including the imposition of tariffs and retaliatory tariffs, may adversely impact our business, financial condition, and results of operations.”see in full comparison
“Privacy, data protection, and AI laws at the local, state, federal, and international levels impose obligations on us to protect the confidentiality of personal information and create additional compliance and liability risks, including in connection with cybersecurity incidents. …”see in full comparison
“Our supply chain is also subject to increasing regulatory requirements, including rules aimed at extinguishing forced labor that require extensive efforts to map supply chains effectively and efficiently beyond tier 1 suppliers for any involvement in human rights abuses. Goods suspected of being manufactured with forced labor could be blocked from importation into the United States, which could impact our ability to obtain necessary components and materials and adversely affect our revenue. …”see in full comparison
“LGL Group continues to perform functions for us, and we continue to perform functions for LGL Group, on a transitional basis, and as a result we may experience operational disruptions and incur significant costs to perform these functions ourselves following the transition period or be subject to claims and liability.”see in full comparison
A cyber incident is considered to be any adverse event that threatens the confidentiality, integrity or availability of our information resources. These incidents may be an intentional attack or an unintentional event and could involve gaining unauthorized access to our information systems for purposes of misappropriating assets, stealing confidential information, corrupting data or causing operational disruption. The result of these incidents may include disrupted operations, misstated or unreliable financial data, liability for stolen assets or information, increased cybersecurity protection and insurance costs, litigation and damage to our investor relationships. As our reliance on technology increases, so will the risks posed to our information systems, both internal and those we outsource. There is no guarantee that any processes, procedures and internal controls we have implemented or will implement will prevent cyber intrusions, which could have a negative impact on our financial results, operations, business relationships or confidential information. We are also subject to evolving disclosure and governance requirements related to cybersecurity, and failure to timely assess and disclose material cybersecurity incidents or to maintain effective processes could result in regulatory scrutiny, litigation, and reputational harm.see in full comparison
Full comparison: every changed paragraph (29)
Our business, financial condition, operating results and cash flows may be adversely affected by changes in global economic conditions and geopolitical risks, including credit market conditions, trade policies, tariffs, levels of consumer and business confidence, commodity prices and availability, inflationary pressure, exchange rates, levels of government spending and deficits, social or political conditions, and other challenges that could affect the global economy including impacts associated with the continuing developments in the war against Ukraine and sanctions which have been announced by the United States and other countries against Russia, which have caused significant uncertainty, adding to continuing concerns about supply chain disruptions, inflation and increases in interest rates in the markets in which we operate. Similar geopolitical tensions and political and/or armed conflicts, including tensions between the U.S. and China, China and Taiwan, and the conflictconflicts between the U.S. and Iran and Israel and Palestine could adversely impact our financial performance and global operations. Such conditions could have an adverse impact on our flexibility to react to changing economic and business conditions and on our ability to fund our operations. In addition, restrictions on credit availability could adversely affect the ability of our customers to make payments. Similarly, credit restrictions may adversely affect our supplier base and increase the potential for one or more of our suppliers to experience financial distress.
Amounts outstanding under our LoanCredit Agreement would bear interest at the Secured Overnight Financing Rate ("SOFR") plus a margin ofranging 2.25%,from 2.00% to 3.00%, with a SOFR floor of 0.00%. Variable rate borrowings expose us to potential increased interest expense in a rising interest rate environment, if we utilize the line of credit. If interest rates were to increase, our debt service obligations on variable rate indebtedness would increase even though the amount borrowed remained the same, which could adversely affect our cash flows. As of December 31, 20242025 and 2023,2024, we had no outstanding balances under the lineCredit ofAgreement credit.or the Previous Credit Agreement.
We are engaged only in the design, manufacture and marketing of standard and custom-engineered electronic components that are used primarily for the control of frequency and spectrum of signals in electronic circuits. Virtually all of our 20242025 and 20232024 revenues came from sales of electronic components, which consist of packaged quartz crystals, oscillator modules, electronic filters and integratedRF modules.solutions.
For the year ended December 31, 2024,2025, our largest and second largest customers accounted for 37.0%36.0% and 17.4%14.9% of the Company's total revenues, respectively. Additionally, as of December 31, 2024,2025, four of our largest customers accounted for approximately 66.2%71.4% of our gross accounts receivable balance. The loss of any of these customers, a decrease in their demand for our products, or the insolvency of any of these customers could have a material adverse effect on our results of operations or liquidity.
A significant portion of our revenue is derived from customers in the aerospace and defense industry, and our business could be adversely affected by changes in government spending or procurement policies.
We derive a significant portion of our revenue from sales to customers in the aerospace and defense markets. These customers in turn generally contract with government agencies. The funding of government programs is subject to Congressional appropriation and national budget deficit reduction initiatives. Future spending levels are difficult to predict, and the termination or curtailment of individual programs could adversely affect our business. Most governmental programs are subject to funding approval through congressional appropriations which can be modified or terminated without warning upon the determination of a legislative or administrative body. Appropriations can also be affected by legislation that addresses larger budgetary issues of the U.S. government which could reduce available funding for most federal agencies, including the United States Department of War. Government contracts are also subject to specific regulations, and failure to comply with applicable requirements could result in contract termination, suspension, or debarment from future government contracting. It is difficult to assess how this may impact our defense industry customers and the business we do with them in the future.
Our future growth and success will depend in large part upon our ability to recruit highly skilled technical personnel, including engineers, and to retain our existing management and technical personnel. ThereIn addition, the loss or retirement of key employees presents particular challenges to the extent the departing employee had particularly valuable knowledge or experiences. This requires us to identify and train existing or new employees to perform necessary functions, which we may be unable to do, or which could result in unexpected costs, reduced productivity, or difficulties with respect to internal processes and controls. If we fail to have succession plans in place or our succession plans do not operate effectively, we may not be able to maintain continuity and our business could be adversely affected. Further, there is a labor shortage in the markets in which we operate which are highly competitive, and some of our operations are not located in highly populated areas. As a result, we may not be able to recruit and retain key personnel. Our failure to hire, retain or adequately train key personnel could have a negative impact on our performance.
Our supply chain is also subject to increasing regulatory requirements, including rules aimed at extinguishing forced labor that require extensive efforts to map supply chains effectively and efficiently beyond tier 1 suppliers for any involvement in human rights abuses. Goods suspected of being manufactured with forced labor could be blocked from importation into the United States, which could impact our ability to obtain necessary components and materials and adversely affect our revenue. Additionally, foreign governments may restrict our access to supply; for example, if China were to further restrict export of rare earth minerals, our suppliers’ ability to obtain such supply may be constrained and we may be unable to obtain sufficient quantities, or obtain supply in a timely manner, or at a commercially reasonable cost.
A number of our customers are U.S. Governmentgovernment contractors. As one of their suppliers, we must comply with significant procurement regulations and other requirements. Under applicable federal regulations for defense contractors, we will be required to comply with the Cybersecurity Maturity Model Certification ("CMMC") program in the next several years and other similar cybersecurity requirements. We also maintain registration under ITAR for certain of our production facilities. One of those production facilities must comply with additional requirements and regulations for its production processes and for selected personnel in order to maintain the security of classified information. These requirements, although customary within these markets, increase our performance and compliance costs. Compliance with applicable regulatory requirements is subject to continual review and is rigorously monitored through periodic inspections and product field monitoring. If any inspection reveals noncompliance with these regulations, it could adversely affect our operations. Our international operations are, and will continue to be, subject to risks relating to changes in foreign legal and regulatory requirements. If any of these various requirements change, our costs of complying with them could increase and reduce our operating margins. To the extent that we are unable to comply with the CMMC or other requirements, our business with the Department of DefenseWar or its prime customers could be at risk.
From time to time, we may also be subject to U.S. Governmentgovernment investigations relating to our or our customers' operations and products and are expected to perform in compliance with a vast array of federal laws, including the Truth in Negotiations Act, the False Claims Act, the International Traffic in Arms Regulations promulgated under the Arms Export Control Act, and the Foreign Corrupt Practices Act.Act, and other federal statutes and regulations, including those established by OFAC. We or our customers may be subject to reductions of the value of contracts, contract modifications or termination, and the assessment of penalties and fines, which could negatively impact our results of operations and financial condition, or result in a diminution in revenue from our customers, if we or our customers are found to have violated the law or are indicted or convicted for violations of federal laws related to government security regulations, employment practices or protection of the environment, or are found not to have acted responsibly as defined by the law. Such convictions or actions could also result in suspension or debarment from serving as a supplier to government contractors for some period of time. Such convictions or actions could have a material adverse effect on us and our operating results. The costs of cooperating or complying with such audits or investigations may also adversely impact our financial results.
Additionally, to date, very few of our international revenue and cost obligations have been denominated in foreign currencies. As a result, changes in the value of the United StatesU.S. dollar relative to foreign currencies may affect our competitiveness in foreign markets. We do not currently engage in foreign currency hedging activities, but may do so in the future to the extent that we incur a significant amount of foreign-currency denominated liabilities.
Changes in U.S. trade policies, including the imposition of tariffs and retaliatory tariffs, may adversely impact our business, financial condition, and results of operations.
We are subject to the trade policies, export/import controls, and other rules and regulations, including tariffs, trade sanctions, and license requirements of the U.S. and other government authorities. During the first Trump Administration from 2017 to 2021, certain tariffs and retaliatory tariffs, as well as other trade restrictions, were imposed on various products and materials. In 2025, President Trump again imposed tariffs and retaliatory tariffs against U.S. trading partners, some countries responded with new or increased tariffs of their own, and the amount of the import tariff and the number of products subject to tariffs changed multiple times based on actions by the U.S. government .However, there is currently significant uncertainty about the future relationship between the United States and various other countries with respect to trade policies, treaties, tariffs and customs duties. On February 20, 2026, the U.S. Supreme Court issued a ruling striking down certain tariffs previously imposed under the International Emergency Economic Powers Act ("IEEPA"). Following the Supreme Court’s decision, the Trump Administration announced its intention to invoke other laws to collect tariffs and announced new tariffs on imports from all countries, in addition to any existing non-IEEPA tariffs. There remains substantial uncertainty regarding the duration of existing and newly announced tariffs, potential changes or pauses to such tariffs, tariff levels, and whether further additional tariffs or other retaliatory actions may be imposed, modified, or suspended, and the impacts of such actions on our business.
Future tariffs and trade restrictions may cause the prices of our vendors’ products to increase, which could reduce demand for such products, or reduce our vendors’ margins, and adversely impact their revenues, financial results, and ability to service debt. This in turn could adversely affect our financial condition and results of operations. In addition, to the extent changes in the political environment have a negative impact on us or on the markets in which we operate our business, our results of operations and financial condition could be materially and adversely impacted in the future. Given our manufacturing operations in India and sales office in Hong Kong, any expansion of tariffs to additional countries or retaliatory measures by foreign governments could directly impact our cost structure and competitive position. At this time, the situation remains dynamic and it remains unclear what the U.S. government or foreign governments will or will not do with respect to additional tariffs that may be imposed or international trade agreements and policies.
We rely on third-party providers for cloud infrastructure, hosting, content delivery, telecommunications, and other critical services. Disruptions, outages, performance degradations, cybersecurity incidents, or other failures at these providers, or at their subcontractors and subprocessors, could impair our operations, internal processes, and ability to serve customers. Certain events, including prolonged cloud service disruptions, domain name system failures, payment processor outages, or the insolvency or other failure of a key vendor, may exceed the scope of our business continuity and disaster recovery assumptions and could result in material operational disruption, data loss, reputational harm, and increased costs.
Our reliance on a limited number of providers for certain services may increase the severity of these risks, including the potential impact of outages, security incidents, or adverse changes to service levels, terms of use, or pricing. In addition, cyber insurance may be unavailable on commercially reasonable terms, may not be sufficient to cover all losses, and may be subject to retentions, sublimits, exclusions, and other limitations that could reduce or eliminate coverage for certain costs, liabilities, or lost profits.
Our IT systems require sustained investment to maintain, protect, and enhance existing systems and to develop new systems to keep pace with evolving technologies and regulatory standards. We are also evaluating and may implement generative artificial intelligence ("AI") technologies in our operations, and our suppliers, customers, and vendors may do the same. While AI may create opportunities for innovation and efficiency, AI-enabled systems may not perform as intended and may introduce or exacerbate operational, privacy, cybersecurity, and intellectual property risks, including inaccurate or biased outputs, data leakage, misuse, and claims or regulatory scrutiny relating to training data, model operation, or generated content. We may also depend on third-party AI models and vendors, and their availability, reliability, performance, or terms of use may change, which could increase costs or negatively affect our operations.
Our business could be negatively impacted by cybersecurity events and other disruptions. We face various cybersecurity threats, including threatsattacks tousing malware, ransomware, distributed denial of service attacks, credential stuffing, supply-chain compromises of software updates, managed service providers, or widely used tools, or phishing incidents resulting in unauthorized access, theft, use, destruction, or other compromises of our IT infrastructure and attempts to gain unauthorized access to our proprietary or classified information, denial-of-service attacks,systems, as well as threats to the physical security of our facilities and employees, and threats from terrorist acts. In addition, we face cybersecurity threats from entities and persons that may seek to target us through our customers, suppliers and other third parties with whom we do business. Many of these cybersecurity threats are increasingly sophisticated and constantly evolving, especially with the growing prevalence of artificial intelligence. Accordingly, we maintain information security staff, policies and procedures for managing risk to our information systems, and we review and update our policies, procedures and practices in light of evolving threats. We conduct employee training on cybersecurity to mitigate persistent and continuously evolving cybersecurity threats. However, there can be no assurance that any such actions, including the timeliness of our efforts to review, update or implement policies, procedures and practices in light of evolving threats, or the safeguards put in place by our customers, suppliers and other parties on which we rely, will be sufficient to detect, prevent and mitigate cybersecurity breaches or disruptions, or the unauthorized release of sensitive information or corruption of data.
Privacy, data protection, and AI laws at the local, state, federal, and international levels impose obligations on us to protect the confidentiality of personal information and create additional compliance and liability risks, including in connection with cybersecurity incidents. A growing patchwork of privacy and AI statutes and regulations imposes differing and evolving requirements relating to notices and disclosures, consumer rights and appeals, data minimization, restrictions on the collection and use of sensitive data, targeted advertising, and certain forms of profiling or automated decision-making. We may also be subject to laws and regulations governing children’s and teen privacy, biometric identifiers and voiceprints, and marketing and telemarketing practices, including requirements for email, SMS, and call or text consent. Transfers of personal data across borders may require the use of specific transfer mechanisms and the implementation of additional safeguards. These obligations vary materially by jurisdiction and may increase compliance complexity and costs, limit our ability to develop or offer new products or services, and adversely affect consumer experience.
A cyber incident is considered to be any adverse event that threatens the confidentiality, integrity or availability of our information resources. These incidents may be an intentional attack or an unintentional event and could involve gaining unauthorized access to our information systems for purposes of misappropriating assets, stealing confidential information, corrupting data or causing operational disruption. The result of these incidents may include disrupted operations, misstated or unreliable financial data, liability for stolen assets or information, increased cybersecurity protection and insurance costs, litigation and damage to our investor relationships. As our reliance on technology increases, so will the risks posed to our information systems, both internal and those we outsource. There is no guarantee that any processes, procedures and internal controls we have implemented or will implement will prevent cyber intrusions, which could have a negative impact on our financial results, operations, business relationships or confidential information. We are also subject to evolving disclosure and governance requirements related to cybersecurity, and failure to timely assess and disclose material cybersecurity incidents or to maintain effective processes could result in regulatory scrutiny, litigation, and reputational harm.
Our management is responsible for establishing and maintaining adequate internal control over financial reporting and for evaluating and reporting on our system of internal control. Our internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles in the United States ("U.S. GAAP"). We are required to comply with the Sarbanes-Oxley Act of 2002, as amended (the "Sarbanes-Oxley Act"), and other rules that govern public companies.
If we identify material weaknesses in our internal control over financial reporting in the future, if we cannot comply with the requirements of the Sarbanes-Oxley Act in a timely manner or attest that our internal control over financial reporting is effective, or if our independent registered public accounting firm cannot express an opinion as to the effectiveness of our internal control over financial reporting when required, we may not be able to report our financial results accurately and timely. As a result, investors, counterparties and consumers may lose confidence in the accuracy and completeness of our financial reports. Accordingly, access to capital markets and perceptions of our creditworthiness could be adversely affected, and the market price of our common stock could decline. In addition, we could become subject to investigations by the stock exchange on which our securities are listed, the Securities and Exchange Commission (the “SEC”) or other regulatory authorities, which could require additional financial and management resources. These events could have a material and adverse effect on our business, operating results, financial condition and prospects.
As a result of the Separation, certain of our directors and officers may have actual or potential conflicts of interest because of their positions or relationships with The LGL Group.Group, Inc..
As a result of the Separation, Marc J. Gabelli serves as special advisor to our Chairman of the Board of Directors and also serves as Executive Chairman of the Board of Directors andof co-Chief Executive Officer ofThe LGL Group.Group, Inc. ("LGL Group"). Such dual roles could create, or appear to create, potential conflicts of interest when LGL Group and our officers and directors face decisions that could have different implications for the two companies.
LGL Group continues to perform functions for us, and we continue to perform functions for LGL Group, on a transitional basis, and as a result we may experience operational disruptions and incur significant costs to perform these functions ourselves following the transition period or be subject to claims and liability.
Prior to the Separation, LGL Group performed many important corporate functions for us, including information technology, shared services, insurance, logistics, human resources, finance and internal audit. In connection with the Separation, we entered into certain arrangements with LGL Group pursuant to which we and LGL Group will continue to provide to each other, on an ongoing basis, certain functions and services that the companies have historically shared. LGL Group may not successfully execute its obligations to us under these arrangements, and any interruption in the functions or services that will be provided to us by LGL Group following the Separation could have a material adverse effect on our business, results of operations, financial condition and cash flows.
In addition, at the end of this transition period, we will need to perform these functions ourselves or hire third parties to perform these functions on our behalf. The costs associated with performing or outsourcing these functions may exceed the amounts reflected in our historical combined financial statements that were incurred as a subsidiary of LGL Group. A significant increase in the costs of performing or outsourcing these functions could materially and adversely affect our business, results of operations, financial condition and cash flows.
We are subject to significant restrictions on our actions in order to avoid triggering significant tax-related liabilities.
The Amended and Restated Tax Indemnity and Sharing Agreement ("Tax Agreement") by and between the Company and LGL Group generally prohibits us from taking certain actions that could cause the Separation to fail to qualify as a tax-free transaction, including but not limited to, within two (2) years of the Separation date not entering into any agreement, understanding or arrangement involving the substantial acquisition of stock of the Company or a substantial shift in ownership (by vote or value) of the Company.
Management's Discussion & Analysis (MD&A)
New heading “Revolving Credit Facility and Delayed Draw Facility”
Removed heading “Revolving Line of Credit”
Largest changes
“On December 31, 2025, we entered into an amended and restated credit agreement (the "Credit Agreement") with Fifth Third Bank, National Association ("Fifth Third Bank"), replacing our prior credit facility with Fifth Third Bank (the "Previous Credit Agreement"). The Credit Agreement provides for a $10.0 million revolving credit facility (the "Revolving Facility") and a $10.0 million delayed draw term loan facility (the "Delayed Draw Facility"). …”see in full comparison
“On June 15, 2022, we entered into a loan agreement (the "Loan Agreement") for a revolving line of credit with Fifth Third Bank, National Association, for up to $5.0 million bearing interest at 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 certain financial covenants based on the following criteria: (a) Minimum Fixed Charge Coverage Ratio; (b) Minimum Current Ratio; and (c) Minimum Tangible Net Worth (each as defined in the Loan Agreement). …”see in full comparison
Gross margin (Revenues less Manufacturing cost of sales as a percentage of Revenues)see in full comparisonincreaseddecreased550180 basis points from40.7% in 2023 to46.2% in 2024 to 44.4% in 2025 reflecting product mix and higherrevenues,tariff-relatedimproved manufacturing efficiencies, and a higher margin product mix.costs.
“Adjusted EBITDA increased $1,441 from $11,141 in 2024 to $12,582 in 2025. The increase was primarily due to higher revenues discussed above, continued operating leverage, and lower incentive compensation partially offset by lower gross margin discussed above. Adjusted EBITDA in 2024 included bonus expense of approximately 3.0% of revenues, which was not incurred in 2025.”see in full comparison
Full comparison: every changed paragraph (18)
For a discussion of the year ended December 31, 20232024 compared to the year ended December 31, 2022,2023, refer to Part II, Item 7, "Management's Discussion and Analysis of Financial Condition and Results of Operations" in our Annual Report on Form 10-K for the year ended December 31, 2023,2024, filed with the SEC on March 25,27, 2024,2025, which is available free of charge on the SEC's website at https://www.sec.gov and on our website at ir.mtronpti.com.ir.mtron.com.
Total revenues increased $7,844,$5,405, or 19.1%,11.0%, from $41,168 in 2023 to $49,012 in 2024 to $54,417 in 2025 primarily due to strong defense program product and solution shipments.shipments, as well as an increase in shipments in the avionics and industrials sectors.
The Company's total costs and expenses for 2024 included bonus expense of approximately $1.5 million, or 3.0% of revenues, which was not incurred in 2025.
Gross margin (Revenues less Manufacturing cost of sales as a percentage of Revenues) increaseddecreased 550180 basis points from 40.7% in 2023 to 46.2% in 2024 to 44.4% in 2025 reflecting product mix and higher revenues,tariff-related improved manufacturing efficiencies, and a higher margin product mix.costs.
Total other income, net increased $280,$282, or 277.2%,74.0%, from $101 in 2023 to $381 in 2024 to $663 in 2025 primarily due to a $236$296 increase in Interest income, net from $7 in 2023 to $243 in 2024 to $539 in 2025 driven by higher interest income earned related to an increase inaverage balances invested in money market mutual funds.
Income tax expense
increased
$1,228,$368, or
134.8%,17.2%, from
$911 in
2023 to
$2,139 in
2024 to
$2,507 in
2025 primarily due to the increase in Income before income taxes driven by the increase in revenues discussed above.
As of December 31, 2024,2025, our order backlog was $47,239,$76,425, aan decreaseincrease of $592,$29,186, or 1.2%,61.8%, from $47,831$47,239 as of December 31, 2023.2024. The decreaseincrease in backlog from December 31, 20232024 reflects the nature of a program centric business model, which can materially affect backlog based on the timing and size of these orders.
To supplement our Consolidated Financial Statements presented on a U.S. 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 U.S. GAAP.
Adjusted EBITDA increased $1,429 from $3,056 for the three months ended December 31, 2024 to $4,485 for the three months ended December 31, 2025. The increase was primarily due to higher revenues and lower engineering, selling and administrative expenses partially offset by lower gross margin discussed above.
Adjusted EBITDA increased $659 from $2,397 for the three months ended December 31, 2023 to $3,056 for the three months ended December 31, 2024. The increase was primarily due to improved gross margins, continued containment of expenses, a higher margin product mix, and decrease in non-cash stock compensation.
Adjusted EBITDA increased $1,441 from $11,141 in 2024 to $12,582 in 2025. The increase was primarily due to higher revenues discussed above, continued operating leverage, and lower incentive compensation partially offset by lower gross margin discussed above. Adjusted EBITDA in 2024 included bonus expense of approximately 3.0% of revenues, which was not incurred in 2025.
Adjusted EBITDA increased $3,449 from $7,692 in 2023 to $11,141 in 2024. The increase was primarily due to improved gross margins and continued containment of expenses, a higher margin product mix, and a decrease in non-cash stock compensation.
The increase was partially offset by the following:
Cash provided by (used in) financing activities was $3,105$142 in 20242025 compared to ($137)$3,105 in 2023,2024, ana increasedecrease of $3,242$2,963 primarily due to thelower exerciseexercises of stock options awarded in December 2023.
Revolving Credit Facility and Delayed Draw Facility
On December 31, 2025, we entered into an amended and restated credit agreement (the "Credit Agreement") with Fifth Third Bank, National Association ("Fifth Third Bank"), replacing our prior credit facility with Fifth Third Bank (the "Previous Credit Agreement"). The Credit Agreement provides for a $10.0 million revolving credit facility (the "Revolving Facility") and a $10.0 million delayed draw term loan facility (the "Delayed Draw Facility"). Borrowings under the Revolving Facility and the Delayed Draw Facility bear interest at a rate based on the Secured Overnight Financing Rate ("SOFR") plus a margin ranging from 2.00% to 3.00%, determined by the Company's leverage ratio, with a SOFR floor of 0.00%. The Company will pay a fee on the average unused daily amount of the facilities at a rate ranging from 0.20% and 0.30%, determined by the Company's leverage ratio. Amounts outstanding under the Revolving Facility are due at maturity on December 31, 2028, and advances under the Delayed Draw Facility are available for a period of 36 months from the date of the Credit Agreement, with each advance maturing 36 months after funding and subject to quarterly amortization requirements. The Credit Agreement contains various affirmative and negative covenants that are customary for transactions of this type, including limitations on the incurrence of debt and liabilities, as well as financial reporting requirements. The Credit Agreement also imposes certain financial covenants based on the following criteria: (a) Leverage Ratio and (b) Fixed Charge Coverage Ratio (each as defined in the Credit Agreement). All loans pursuant to the Credit Agreement are secured by a first-priority lien on substantially all of the personal property of the Company. See Note 7 – Revolving Credit Agreement to the Consolidated Financial Statements included in Item 8. Financial Statements and Supplementary Data of this Report for details of the Credit Agreement.
Revolving Line of Credit
On June 15, 2022, we entered into a loan agreement (the "Loan Agreement") for a revolving line of credit with Fifth Third Bank, National Association, for up to $5.0 million bearing interest at 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 certain financial covenants based on the following criteria: (a) Minimum Fixed Charge Coverage Ratio; (b) Minimum Current Ratio; and (c) Minimum Tangible Net Worth (each as 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. See Note 5 – Revolving Credit Agreement to the Consolidated Financial Statements included in Item 8. Financial Statements and Supplementary Data of this Report for details of the Loan Agreement.
What changed in the latest 10-Q
Risk Factors
Not available: the section could not be located automatically in one of the filings (non-standard layout or incorporated by reference). See the original filing. Open the filing on SEC.gov.
Management's Discussion & Analysis (MD&A)
New heading “Three months ended June 30, 2026 compared to three months ended June 30, 2025”
New heading “Six months ended June 30, 2026 compared to six months ended June 30, 2025”
New heading “Total Costs and Expenses”
New heading “Total Other Income (Expense), Net”
New heading “Income Tax Expense”
New heading “Six months ended June 30, 2026 compared to six months ended June 30, 2025”
Removed heading “Three months ended March 31, 2026 compared to three months ended March 31, 2025”
Largest changes
“Three months ended March 31, 2026 compared to three months ended March 31, 2025”see in full comparison
“Three months ended June 30, 2026 compared to three months ended June 30, 2025”see in full comparison
“Six months ended June 30, 2026 compared to six months ended June 30, 2025”see in full comparison
“Six months ended June 30, 2026 compared to six months ended June 30, 2025”see in full comparison
Full comparison: every changed paragraph (34)
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 26, 2026. The terms the "Company,", "Mtron," "MPTI," "we," "our,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.
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'sMtron’s primary markets are aerospace & defense, aerospace,avionics, space,industrials, and avionics.space.
Three months ended June 30, 2026 compared to three months ended June 30, 2025
Three months ended March 31, 2026 compared to three months ended March 31, 2025
Total revenues increased $1,954,$1,827, or 15.3%,13.8%, from $12,732$13,282 for the three months ended MarchJune 31,30, 2025 to $14,686$15,109 for the three months ended MarchJune 31,30, 2026 primarily due to strong defenseaerospace and defense, space, and avionics product shipments as well as higher avionics sector shipments.
Total costs and expenses increased $1,357,$1,952, or 12.7%,17.1%, from $10,719$11,438 for the three months ended MarchJune 31,30, 2025 to $12,076$13,390 for the three months ended MarchJune 31,30, 2026. The increasefollowing isitems primarily duecontributed to the followingoverall increase:
Gross margin (Revenues less Manufacturing cost of sales as a percentage of Revenues) increaseddecreased 244240 basis points from 42.5%43.6% for the three months ended MarchJune 31,30, 2025 to 44.9%41.2% for the three months ended MarchJune 31,30, 2026 reflecting higher$470 revenues,of stock-based compensation related to 2025 bonuses and product mix,mix partially offset by higher revenues and manufacturing efficiencies.
Total Other income, net increased $147,$573, or 145.5%,379.5%, from $101$151 for the three months ended MarchJune 31,30, 2025 to $248$724 for the three months ended MarchJune 31,30, 2026. The increase iswas primarily due to a $259,$566, or 233.3%,456.5%, increase in Interest income, net from $111$124 for the three months ended MarchJune 31,30, 2025 to $370$690 for the three months ended MarchJune 31,30, 2026 driven by higher balances invested in money market mutual funds.
The increase was partially offset by a $112, or 1,120.0%, decrease in Other income (expense), net from ($10) for the three months ended March 31, 2025 to ($122) for the three months ended March 31, 2026 primarily due to unfavorable currency movements related to our India production facility.
Income tax expense decreasedincreased $14,$138, or 2.9%,31.7%, from $484$435 for the three months ended MarchJune 31,30, 2025 to $470$573 for the three months ended MarchJune 31,30, 2026 primarily due to temporary differences related to stock compensation partially offset by the increase in Income before incomesincome taxes.taxes driven by the increase in revenues discussed above.
Six months ended June 30, 2026 compared to six months ended June 30, 2025
The following table presents our Condensed Consolidated Statements of Operations for the periods indicated:
Total Revenues
Total revenues increased $3,781, or 14.5%, from $26,014 for the six months ended June 30, 2025 to $29,795 for the six months ended June 30, 2026 primarily due to strong aerospace and defense program and avionics shipments.
Total Costs and Expenses
Total costs and expenses increased $3,309, or 14.9%, from $22,157 for the six months ended June 30, 2025 to $25,466 for the six months ended June 30, 2026. The following items contributed to the overall increase:
Gross Margin
Gross margin (Revenues less Manufacturing cost of sales as a percentage of Revenues) remained flat at 43.0% for the six months ended June 30, 2026 and 2025.
Total Other Income (Expense), Net
Total Other income (expense), net increased $720, or 285.7%, from $252 for the six months ended June 30, 2025 to $972 for the six months ended June 30, 2026. The increase was primarily due to a $825, or 351.1%, increase in Interest income, net from $235 for the six months ended June 30, 2025 to $1,060 for the six months ended June 30, 2026 primarily due to higher balances invested in money market mutual funds.
The increase was partially offset by a $105, or 617.6%, decrease in Other income (expense), net from $17 for the six months ended June 30, 2025 to ($88) for the six months ended June 30, 2026 primarily due to unfavorable currency movements.
Income Tax Expense
Income tax expense increased $124, or 13.5%, from $919 for the six months ended June 30, 2025 to $1,043 for the six months ended June 30, 2026 primarily due to the increase in Income before income taxes driven by the increase in revenues discussed above.
As of MarchJune 31,30, 2026, our order backlog was $76,834,$83,968, an increase of $409,$7,543, or 0.5%,9.9%, from $76,425 as of December 31, 2025 and an increase of $21,333,$22,769, or 38.4%,37.2%, from $55,501$61,199 as of MarchJune 31,30, 2025. The increase in backlog from December 31, 2025 is primarily driven by orders inreflects the continued strength of our aerospace & defense and defense,avionics avionics, and space sectors during the quarter. The nature of a program centric business model materially affects backlog based on the timing and size of thecustomer orders.
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 as well as a more accurate view of the Company's ability to generate cash profits:
Three months ended MarchJune 31,30, 2026 compared to three months ended MarchJune 31,30, 2025
Adjusted EBITDA increased $670$982 from $2,502$2,419 for the three months ended MarchJune 31,30, 2025 to $3,172$3,401 for the three months ended MarchJune 31,30, 2026 primarily due to higher revenues andpartially improvedoffset by lower gross margins.
Six months ended June 30, 2026 compared to six months ended June 30, 2025
Adjusted EBITDA increased $1,652 from $4,921 for the six months ended June 30, 2025 to $6,573 for the six months ended June 30, 2026 primarily due to higher revenues.
As of MarchJune 31,30, 2026 and December 31, 2025, Cash and cash equivalents were $51,958$96,245 and $20,891, respectively.
Cash provided by operating activities was $2,118$5,822 for the threesix months ended MarchJune 31,30, 2026 compared to $1,607cash provided by operating activities of $4,462 for the threesix months ended MarchJune 31,30, 2025, an increase of $511,$1,360, primarily due to the following:
Cash used in investing activities was $452$2,326 for the threesix months ended MarchJune 31,30, 2026 compared to cash used in investing activities of $586$1,398 for the threesix months ended MarchJune 31,30, 2025, aan decreaseincrease of $134,$928, primarily due to the timing of capital projects, where delivery is expected at a future date.date as well as the purchase of short-term investments and other investments.
Cash provided by financing activities was $29,401$71,858 for the threesix months ended MarchJune 31,30, 2026 compared to cash providedused byin financing activities of $0$176 for the threesix months ended MarchJune 31,30, 2025, an increase of $29,401,$72,034, primarily due to the settlement of warrants in January 2026 as well asand the exercisecompletion of stockthe options.subscription rights offering in April 2026.
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 MarchJune 31,30, 2026 and December 31, 2025, some deposits held at financial institutions were in excess of federally insured limits. The Company has not experienced any losses related to these balances.
MPTI insider buying and selling (Form 4)
Since 2026-04-11, insiders reported open-market purchases in 0 Form 4 filings and open-market sales in 5 filings (3 insiders, 3 trade dates, 3,445 shares, about $204.2K). Net open-market shares: -3,445 (purchases minus sales); net value about -$204.2K.Totals add up every open-market (code P and S) line in those filings, using the prices reported in the filings. Awards, option exercises, tax withholding and gifts are listed below but not counted.
| Trade date | Insider | Transaction | Shares | Price | Value |
|---|---|---|---|---|---|
| 2026-08-11 | Biles Linda M |
Open-market sale | 1,218 | $85.05 | $103.6K |
| 2026-05-04 | Drafts William Arnold |
Open-market sale | 361 | $66.78 | $24.1K |
| 2026-05-04 | Pforr Cameron |
Open-market sale | 840 | $66.78 | $56.1K |
| 2026-05-04 | Biles Linda M |
Open-market sale | 306 | $66.78 | $20.4K |
| 2026-04-29 | Pforr Cameron |
Option exercise | 220 | $40.32 | $8.9K |
| 2026-04-28 | Pforr Cameron |
Option exercise | 220 | $40.32 | $8.9K |
| 2026-04-27 | Arteaga Ivan |
Option exercise | 24 | $59.00 | $1.4K |
| 2026-04-20 | Gabelli Marc |
Option exercise | 3,276 | $59.00 | $193.3K |
| 2026-04-20 | Susanto Hendi |
Option exercise | 1,071 | $59.00 | $63.2K |
| 2026-04-14 | Susanto Hendi |
Option exercise | 454 | $59.00 | $26.8K |
| 2026-04-14 | Biles Linda M |
Open-market sale | 720 | — | — |
| 2026-04-10 | Arteaga Ivan |
Option exercise | 174 | $59.00 | $10.3K |
| 2026-04-07 | Pforr Cameron |
Option exercise | 100 | $59.00 | $5.9K |
| 2026-03-19 | Pforr Cameron |
Grant/award | 3,805 | — | — |
| 2026-03-19 | Drafts William Arnold |
Grant/award | 2,840 | — | — |
| 2026-03-19 | Biles Linda M |
Grant/award | 1,565 | — | — |
Well-known investors holding MPTI (13F)
None of the 59 investors we track reported a position in their latest 13F.