EX-99.1 2 lantronix_ex9901.htm PRESS RELEASE

Exhibit 99.1

 

 

 

Lantronix Reports Third Quarter Fiscal 2018

Net Revenue of $11.6 Million

--Achieves $0.02 GAAP Earnings per Share--

 

Irvine, Calif., April 26, 2018 – Lantronix, Inc. (NASDAQ: LTRX) a global provider of secure data access and management solutions for Internet of Things (IoT) assets, today reported results for the third fiscal quarter ended March 31, 2018.

 

Financial Highlights for Third Quarter of Fiscal 2018

·Net revenue increased to $11.6 million with 16% quarter-over-quarter growth in IoT product line
·Gross profit margin of 56.8%, compared with 55.5% for the third quarter of fiscal 2017
·GAAP net income of $344,000 or $0.02 per share compared with GAAP net loss of $162,000, or ($0.01) per share for the third quarter of fiscal 2017
·Non-GAAP net income of $767,000, compared with non-GAAP net income of $484,000 for the third quarter of fiscal 2017
·Cash and cash equivalents increased to $9.0 million
·2nd consecutive quarter of GAAP profitability and 9th consecutive quarter of non-GAAP profitability

 

Operational and Product Highlights

·Most recently, the Company was recognized, for a second year in a row, by CRN® in its 2018 Internet of Things 50 list, which recognizes companies whose innovative offerings are helping connect objects, computing devices, infrastructure, data storage and data analytics that will transform our everyday lives.
·Earlier this month, the Company announced the sampling of its XPort® Edge wired Ethernet gateway, with a patented design that delivers a highly differentiated set of capabilities for quickly adding secure Ethernet connectivity to any device with a serial interface.
·In February, the Company announced the availability of xPico® 250 embedded wireless gateway, and the new Lantronix Gateway Central device management SaaS offering powered by MACH10® which enables device manufacturers, system integrators, solution providers, and end users to provision and manage Lantronix IoT gateways quickly and securely.
·In January, the Company announced a first-of-its-kind real-time network performance monitoring capability for its SLC™ 8000 Console Management Family.

 

“We put up another solid quarter of results and continued to improve our profitability,” said Jeff Benck, Lantronix CEO.  “We are demonstrating the leverage in our OEM business model as we grew our top line while tightly managing expenses and this yielded significant year over year earnings growth. We also announced a number of new IoT products in the quarter that will contribute to our top line growth in the coming quarters.”

 

Conference Call and Webcast

 

Lantronix will host an investor conference call and audio webcast today at 2:00 p.m. Pacific Time (5:00 p.m. Eastern Time) to discuss its results for the third quarter ended March 31, 2018. To access the live conference call, investors should dial 1-844-802-2442 (US) or 1-412-317-5135 (international) and indicate that they are participating in the Lantronix Q3 FY 2018 call. The webcast will be available simultaneously via the investor relations section of the Company’s website at www.lantronix.com.

 

Investors can access a replay of the conference call starting at approximately 5:00 p.m. Pacific Time today at www.lantronix.com. A telephonic replay will also be available through May 3, 2018 by dialing 1-877-344-7529 (US) or 1-412-317-0088 (international) and entering passcode 10119123.

 

 

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About Lantronix

 

Lantronix, Inc. is a global provider of secure data access and management solutions for Internet of Things (IoT) assets. Our mission is to be the leading supplier of IoT solutions that enable companies to dramatically simplify the creation, deployment, and management of IoT projects while providing secure access to data for applications and people.

 

With more than two decades of experience in creating robust machine to machine (M2M) technologies, Lantronix is an innovator in enabling its customers to build new business models and realize the possibilities of the Internet of Things. Our connectivity solutions are deployed inside millions of machines serving a wide range of industries, including industrial, medical, security, transportation, retail, financial, environmental and government.

 

For more information, visit www.lantronix.com.

 

Learn more at the Lantronix blog, www.lantronix.com/blog, featuring industry discussion and updates. To follow Lantronix on Twitter, please visit www.twitter.com/Lantronix. View our video library on YouTube at www.youtube.com/user/LantronixInc or connect with us on LinkedIn at www.linkedin.com/company/lantronix.

 

Discussion of Non-GAAP Financial Measures

 

Lantronix believes that the presentation of non-GAAP financial information, when presented in conjunction with the corresponding GAAP measures, provides important supplemental information to management and investors regarding financial and business trends relating to the company's financial condition and results of operations. Management uses the aforementioned non-GAAP measures to monitor and evaluate ongoing operating results and trends to gain an understanding of our comparative operating performance. The non-GAAP financial measures disclosed by the company should not be considered a substitute for, or superior to, financial measures calculated in accordance with GAAP, and the financial results calculated in accordance with GAAP and reconciliations of the non-GAAP financial measures to the financial measures calculated in accordance with GAAP should be carefully evaluated. The non-GAAP financial measures used by the company may be calculated differently from, and therefore may not be comparable to, similarly titled measures used by other companies. The company has provided reconciliations of the non-GAAP financial measures to the most directly comparable GAAP financial measures.

 

Non-GAAP net income (loss) consists of net income (loss) excluding (i) share-based compensation and the employer portion of withholding taxes on stock grants, (ii) depreciation and amortization, (iii) interest income (expense), (iv) other income (expense), (v) income tax provision (benefit), and (vi) severance and restructuring charges.

 

Forward-Looking Statements

 

This news release contains forward-looking statements, including statements concerning our sales expansion efforts, our product development efforts, and our projected operating and financial performance. These forward-looking statements are intended to qualify for the safe harbor from liability established by the Private Securities Litigation Reform Act of 1995. We have based our forward-looking statements on our current expectations and projections about trends affecting our business and industry and other future events. Although we do not make forward-looking statements unless we believe we have a reasonable basis for doing so, we cannot guarantee their accuracy. Forward-looking statements are subject to substantial risks and uncertainties that could cause our results or experiences, or future business, financial condition, results of operations or performance, to differ materially from our historical results or those expressed or implied in any forward-looking statement contained in this news release. Some of the risks and uncertainties that may cause actual results to differ from those expressed or implied in the forward-looking statements are described in “Risk Factors” in our Annual Report on Form 10-K filed with the Securities and Exchange Commission, or SEC, as well as in our other filings with the SEC. In addition, actual results may differ as a result of additional risks and uncertainties of which we are currently unaware or which we do not currently view as material to our business. For these reasons, investors are cautioned not to place undue reliance on any forward-looking statements. The forward-looking statements we make speak only as of the date on which they are made. We expressly disclaim any intent or obligation to update any forward-looking statements after the date hereof to conform such statements to actual results or to changes in our opinions or expectations, except as required by applicable law or the rules of the NASDAQ Stock Market, LLC. If we do update or correct any forward-looking statements, investors should not conclude that we will make additional updates or corrections.

 

Investor Relations Contacts:

Jeremy Whitaker

Chief Financial Officer

949-453-3990

 

© 2018 Lantronix, Inc. All rights reserved. Lantronix, MACH10, xPico and XPort are registered trademarks, and SGX and SLB are trademarks, of Lantronix, Inc. All other trademarks and trade names are the property of their respective holders.

 

 

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LANTRONIX, INC.

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands)

 

   March 31,   June 30, 
   2018   2017 
Assets          
Current assets:          
Cash and cash equivalents  $8,955   $8,073 
Accounts receivable, net   3,834    3,432 
Inventories, net   7,378    6,959 
Contract manufacturers' receivable   721    476 
Prepaid expenses and other current assets   508    440 
Total current assets   21,396    19,380 
Property and equipment, net   1,058    1,218 
Goodwill   9,488    9,488 
Other assets   73    46 
Total assets  $32,015   $30,132 
           
Liabilities and stockholders' equity          
Current liabilities:          
Accounts payable  $4,173   $2,717 
Accrued payroll and related expenses   2,125    3,084 
Warranty reserve   113    125 
Other current liabilities   3,406    3,063 
Total current liabilities   9,817    8,989 
Long-term capital lease obligations   11    59 
Other non-current liabilities   321    396 
Total liabilities   10,149    9,444 
           
Commitments and contingencies (Note 7)          
           
Stockholders' equity:          
Common stock   2    2 
Additional paid-in capital   211,800    210,550 
Accumulated deficit   (190,307)   (190,235)
Accumulated other comprehensive income   371    371 
Total stockholders' equity   21,866    20,688 
Total liabilities and stockholders' equity  $32,015   $30,132 

 

 

 

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LANTRONIX, INC.

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except per share data)

 

 

   Three Months Ended   Nine Months Ended 
   March 31,   December 31,   March 31,   March 31, 
   2018   2017   2017   2018   2017 
Net revenue  $11,601   $11,336   $11,524   $33,543   $33,686 
Cost of revenue   5,017    5,022    5,126    15,051    15,776 
Gross profit   6,584    6,314    6,398    18,492    17,910 
Operating expenses:                         
Selling, general and administrative   4,241    4,173    4,414    12,400    12,129 
Research and development   1,964    1,874    2,126    6,059    5,944 
Total operating expenses   6,205    6,047    6,540    18,459    18,073 
Income (loss) from operations   379    267    (142)   33    (163)
Interest expense, net   (5)   (5)   (5)   (14)   (18)
Other income (expense), net   (1)   1    2    1    3 
Income (loss) before income taxes   373    263    (145)   20    (178)
Provision for income taxes   29    38    17    92    47 
Net income (loss)  $344   $225   $(162)  $(72)  $(225)
                          
Net income (loss) per share (basic)  $0.02   $0.01   $(0.01)  $(0.00)  $(0.01)
Net income (loss) per share (diluted)  $0.02   $0.01   $(0.01)  $(0.00)  $(0.01)
                          
Weighted-average common shares (basic)   18,210    18,073    17,522    18,050    17,374 
Weighted-average common shares (diluted)   19,118    18,739    17,522    18,050    17,374 

 

 

 

 

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LANTRONIX, INC.

UNAUDITED RECONCILIATION OF NON-GAAP ADJUSTMENTS

(In thousands)

 

 

   Three Months Ended   Nine Months Ended 
   March 31,   December 31,   March 31,   March 31, 
   2018   2017   2017   2018   2017 
                     
GAAP net income (loss)  $344   $225   $(162)  $(72)  $(225)
Non-GAAP adjustments:                         
Cost of revenue:                         
Share-based compensation   14    13    12    40    36 
Depreciation and amortization   53    53    87    168    260 
Total adjustments to cost of revenue   67    66    99    208    296 
Selling, general and administrative:                         
Share-based compensation   237    239    169    688    480 
Employer portion of withholding taxes on stock grants   4    3    4    9    9 
Depreciation and amortization   47    46    56    138    166 
Total adjustments to selling, general and administrative   288    288    229    835    655 
Research and development:                         
Share-based compensation   44    58    43    149    129 
Employer portion of withholding taxes on stock grants   –    –    1    1    1 
Depreciation and amortization   10    10    8    30    29 
Total adjustments to research and development   54    68    52    180    159 
Severance and related charges (reversals)   (21)   –    246    506    246 
Total non-GAAP adjustments to operating expenses   321    356    527    1,521    1,060 
Interest expense, net   5    5    5    14    18 
Other (income) expense, net   1    (1)   (2)   (1)   (3)
Provision for income taxes   29    38    17    92    47 
Total non-GAAP adjustments   423    464    646    1,834    1,418 
Non-GAAP net income  $767   $689   $484   $1,762   $1,193 

 

 

 

 

 

 

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LANTRONIX, INC.

UNAUDITED NET REVENUES BY PRODUCT LINE AND REGION

(In thousands)

                   

 

   Three Months Ended   Nine Months Ended 
   March 31,
2018		   December 31,
2017		   March 31,
2017		   March 31,
2018		   March 31,
2017		 
IoT  $9,281   $7,971   $8,644   $25,729   $24,817 
IT Management   1,964    3,218    2,569    6,971    7,271 
Other   356    147    311    843    1,598 
   $11,601   $11,336   $11,524   $33,543   $33,686 

 

 

 

   Three Months Ended   Nine Months Ended 
   March 31,
2018		   December 31,
2017		   March 31,
2017		   March 31,
2018		   March 31,
2017		 
Americas  $5,832   $6,292   $6,625   $17,821   $19,244 
EMEA   4,055    3,172    3,392    10,391    9,615 
Asia Pacific Japan   1,714    1,872    1,507    5,331    4,827 
   $11,601   $11,336   $11,524   $33,543   $33,686 

 

 

 

 

 

 

 

 

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