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MI

M-tron Industries, Inc. (MPTI)·Q4 2024 Earnings Summary

Executive Summary

  • Q4 2024 delivered robust results: revenue $12.805M (+18.9% YoY), gross margin 47.2% (+360 bps YoY), and diluted EPS $0.73 (vs $0.03 YoY) driven by defense program shipments and improved manufacturing efficiencies .
  • Full-year FY 2024 set records: revenue $49.012M, gross margin 46.2%, diluted EPS $2.65, and adjusted EBITDA $11.141M; backlog ended at $47.2M with cash $12.6M .
  • Versus estimates: Q4 revenue was approximately in-line/slightly below consensus ($12.805M vs $12.9M*), while EPS matched consensus ($0.73 vs $0.73*)—prior quarters beat both revenue and EPS .
  • Management tone: constructive on defense and emerging markets (drones/UAV, space), and reiterated gross margin durability in the high-40s; formal 2025 guidance withheld, but long-term revenue growth targeted at ~9–10% organically .
  • Corporate action: Board declared a dividend of warrants to purchase common stock (record date March 10, 2025), replacing an earlier rights offering; tradability on NYSE anticipated .

What Went Well and What Went Wrong

What Went Well

  • Defense-led growth and product mix uplift: “Revenues…primarily due to strong defense program product and solution shipments,” supporting gross margin expansion to 47.2% in Q4 .
  • Margin durability: Management expects gross margin to remain “high 40s…45% to 48%, 49%,” citing sustainable process improvements and program-rich mix .
  • Balance sheet strength: Year-end cash and equivalents of $12.6M; significant cash generation with adjusted EBITDA of $11.1M for FY 2024 .

What Went Wrong

  • Backlog timing variability: Backlog dipped YoY in Q3 due to timing of large program orders; Q4 closed at $47.2M with January large order arriving after year-end—highlighting timing sensitivity .
  • Formal 2025 guidance withheld: Management opted for prudence amid macro/tariff noise; reiterated long-term ~9–10% organic growth target without formal 2025 ranges .
  • Sequential softness: Revenue and adjusted EBITDA trended down sequentially from Q3 to Q4 (mix/timing), even as YoY gains were strong .

Financial Results

MetricQ2 2024Q3 2024Q4 2024
Revenue ($USD Millions)$11.808 $13.214 $12.805
Diluted EPS ($)$0.63 $0.81 $0.73
Gross Margin (%)46.6% 47.8% 47.2%
Adjusted EBITDA ($USD Millions)$2.523 $3.300 $3.056

Actual vs Consensus (S&P Global)

MetricQ2 2024Q3 2024Q4 2024
Revenue Actual ($USD Millions)$11.808 $13.214 $12.805
Revenue Consensus Mean ($USD Millions)$11.2*$12.2*$12.9*
EPS Actual ($)$0.63 $0.81 $0.73
Primary EPS Consensus Mean ($)$0.50*$0.54*$0.73*

Values retrieved from S&P Global.*

KPIs

KPIQ2 2024Q3 2024Q4 2024
Backlog ($USD Millions)$45.322 $39.763 $47.2
Cash & Equivalents ($USD Millions)$6.501 $8.490 $12.641

End-Market Exposure (qualitative)

Segment/End-MarketQ4 2024 CommentaryFY 2024 Trend
Aerospace & DefensePrimary growth driver; strong shipments Sector up >40% YoY
AvionicsSeeing improving activity; expected upturn by year-end Slight growth; backlog tailwinds expected
Drones/UAV, Radar, EW, SpaceAccumulating design wins; pipeline expanding Strategic focus areas for growth

Notes:

  • Q4 YoY: Revenue +18.9%, Gross margin +360 bps, EPS +2,333% (from $0.03), Adjusted EBITDA +27.5% .

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
RevenueFY 2024$46.0–$48.0M (raised in H1 and reiterated in Q3) Actual $49.012M Raised/Exceeded
EBITDA MarginFY 202419–21% (Adjusted EBITDA margin target) Actual Adjusted EBITDA $11.141M on $49.012M (above guided range) Exceeded
Gross MarginFY 2025Not providedExpect high-40s (45–49%) quarterly range New qualitative frame
Revenue GrowthFY 2025Not providedLong-term ~9–10% organic target; formal guidance withheld near-term Maintained/prudent deferment
Capital Action2025Rights offering proposed (Feb 20, 2025) Warrant dividend declared; record date Mar 10, 2025 Switched to warrant dividend

Earnings Call Themes & Trends

TopicPrevious Mentions (Q-2: Q2 2024)Previous Mentions (Q-1: Q3 2024)Current Period (Q4 2024)Trend
Supply chain/tariffsNot highlighted in releaseBacklog expected ~$50M; timing sensitive No tariff impact to date; monitoring sourcing; planning inventory Stable, vigilant
Gross margin46.6% in Q2; mix/efficiency led 47.8% in Q3; raised FY EBITDA margin guidance Durable high-40s expected (45–49%), process improvements sustainable Sustained high-40s
Defense programs/backlogBacklog $45.3M Backlog $39.8M; large order timing may slip Backlog $47.2M; $10M+ order arrived Jan; more sizable orders expected Strengthening
Avionics commercialStrategic commentary onlyExpect backlog near $50M Anticipated upturn; components on major airframes, biz jets Improving
R&D executionOngoing investment; margin expansion Continued investment; EPS strength Increased engineering spend; automation initiatives Ongoing investment
Drones/UAV, spaceRoadmap in Q2 release Pursuing design wins Active since 2014; wins expected to increase; space ground stations & higher orbit sats Expanding
M&A/partnershipsBandwidth broadened; undervalued targets Disciplined/accretive focus Accretive deals targeted; connectivity partnership for pipeline Active
Capital allocation——Buyback discussed but not active; cash build unless acquisition Flexible

Management Commentary

  • “We’re pleased to report…continued strength in NPI sales and good financial performance for Q4 fiscal year ’24…we have seen no disruption to our business and expect to continue the company’s revenue expansion throughout the year.” — Interim CEO Cameron Pforr .
  • “We should remain in the high 40s…45% to 48%, 49%…it will change by quarter” — Cameron Pforr on gross margin durability .
  • “We will provide some guidance later…long term, we’re a company that can grow very, very consistently at 10% revenue…more comfortable pointing people towards 9%, 10% growth for the year.” — Cameron Pforr .
  • “We expect a fair amount of growth [in drones/UAV]…same with space…we participate…in ground stations as well as spacecraft and higher orbit satellites.” — Cameron Pforr .

Q&A Highlights

  • Tariffs/supply chain: No impact yet; monitoring component sourcing from Asia; planning ahead on inventory .
  • Avionics recovery: Expect strengthening through year-end as Boeing/Airbus supply chains normalize; components on every airframe; biz jets exposure .
  • Backlog/pipeline: Q4 backlog $47.2M; $10M+ order slipped into January; more sizable orders expected in Q1/Q2; press releases to follow .
  • Margin sustainability: High-40s gross margin range seen as sustainable given process engineering, pricing, and program mix .
  • Capital allocation: Cash likely to build absent M&A; buybacks discussed but not active; acquisitions to use cash and modest debt to limit dilution .
  • Warrant dividend rationale: Reward shareholders; tradable warrants anticipated on NYSE; replaces earlier rights offering .

Estimates Context

  • Q4 2024: Revenue $12.805M vs $12.9M consensus* (approximately in-line/slight miss); EPS $0.73 vs $0.73 consensus* (in-line) .
  • Q3 2024: Revenue beat ($13.214M vs $12.2M*); EPS beat ($0.81 vs $0.54*) .
  • Q2 2024: Revenue beat ($11.808M vs $11.2M*); EPS beat ($0.63 vs $0.50*) .

Values retrieved from S&P Global.*

Key Takeaways for Investors

  • Defense program momentum remains the core growth driver; backlog re-accelerated to $47.2M with sizable orders expected—supportive for near-term revenue cadence .
  • Gross margin profile appears structurally higher (high-40s) due to process improvements and mix; monitor quarterly mix effects against the 45–49% commentary range .
  • 2025 formal guidance withheld; anchor near-term modeling on ~9–10% organic revenue growth and high-40s gross margins, with upside from program wins and M&A .
  • Corporate action (warrant dividend) could catalyze shareholder engagement; assess potential dilution mechanics and exercise triggers; tradability anticipated on NYSE .
  • Sequential variability (Q3→Q4) reflects timing/mix; keep focus on full-year trajectory and program-driven visibility rather than quarterly noise .
  • Avionics exposure may turn from headwind to tailwind as airframe production normalizes; incremental order flow supportive into 2025 .
  • Optionality from disciplined, accretive M&A and partnerships (connectivity fund pipeline) offers medium-term EPS leverage; watch execution and valuation discipline .