Lantronix Inc. (NASDAQ: LTRX), a global provider of compute and
connectivity IoT solutions, today reported results for its third
quarter of fiscal 2024.
Net revenue totaled $41.2 million, up 11 percent sequentially
and up 25 percent year-over-year.
GAAP EPS of ($0.01), compared to ($0.08) in the prior year and
($0.07) in the prior quarter.
Non-GAAP EPS of $0.11, compared to $0.06 in the prior year and
$0.08 in the prior quarter.
Business Outlook
For the fourth fiscal quarter of 2024, the company expects
revenue in a range of $46.5 million to $51.5 million and non-GAAP
EPS of $0.12 to $0.18 per share.
Conference Call and Webcast
Management will host an investor conference call and audio
webcast on Monday, April 29, 2024, at 2:00 p.m. Pacific Time (5:00
p.m. Eastern Time) to discuss its results for the third quarter of
fiscal 2024 that ended March 31, 2024. To access the live
conference call, investors should dial 1-844-802-2442 (U.S.) or
1-412-317-5135 (international) and indicate that they are
participating in the Lantronix Q3 FY 2024 call. The webcast will be
available simultaneously via the investor relations section of the
company’s website.
Investors can access a replay of the conference call starting at
approximately 7:00 p.m. Pacific Time on April 29, 2024, at the
Lantronix website. A telephonic replay will also be available
through May 6, 2024, by dialing 1-877-344-7529 (U.S.) or
1-412-317-0088 (international) or Canada toll-free at
1-855-669-9658 and entering passcode 1167329.
About Lantronix
Lantronix Inc. is a global provider of compute and connectivity
IoT solutions that target high-growth industries, including Smart
Cities, Automotive and Enterprise. Lantronix’s products and
services empower companies to achieve success in the growing IoT
markets by delivering customizable solutions that address each
layer of the IoT Stack. Lantronix’s leading-edge solutions include
Intelligent Substations infrastructure, Infotainment systems and
Video Surveillance, supplemented with advanced Out-of-Band
Management (OOB) for Cloud and Edge Computing.
For more information, visit the Lantronix website.
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 consists of net 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), (vi) restructuring, severance and related
charges, (vii) acquisition related costs, (viii) impairment of
long-lived assets, (ix) amortization of purchased intangibles, (x)
amortization of manufacturing profit in acquired inventory, (xi)
fair value remeasurement of earnout consideration, and (xii) loss
on extinguishment of debt.
Non-GAAP EPS is calculated by dividing non-GAAP net loss by
non-GAAP weighted-average shares outstanding (diluted). For
purposes of calculating non-GAAP EPS, the calculation of GAAP
weighted-average shares outstanding (diluted) is adjusted to
exclude share-based compensation, which for GAAP purposes is
treated as proceeds assumed to be used to repurchase shares under
the GAAP treasury stock method.
Guidance on earnings per share growth is provided only on a
non-GAAP basis due to the inherent difficulty of forecasting the
timing or amount of certain items that have been excluded from the
forward-looking non-GAAP measures, and a reconciliation to the
comparable GAAP guidance has not been provided because certain
factors that are materially significant to Lantronix’s ability to
estimate the excluded items are not accessible or estimable on a
forward-looking basis without unreasonable effort.
Forward-Looking Statements
This news release contains forward-looking statements, including
statements concerning our revenue and earnings expectations for the
fourth fiscal quarter of 2024. 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. Other factors which could have a material adverse effect
on our operations and future prospects or which could cause actual
results to differ materially from our expectations include, but are
not limited to: the effects of negative or worsening regional and
worldwide economic conditions or market instability on our
business, including effects on purchasing decisions by our
customers; our ability to mitigate any disruption in our and our
suppliers’ and vendors’ supply chains due to the COVID-19 pandemic
or other outbreaks, wars and recent conflicts in Europe, Asia and
the Middle East, hostilities in the Red Sea, or other causes; our
ability to successfully convert our backlog and current
demand; our ability to successfully implement our acquisitions
strategy or integrate acquired companies; uncertainty as to the
future profitability of acquired businesses, and delays in the
realization of, or the failure to realize, any accretion from
acquisition transactions; acquiring, managing and integrating new
operations, businesses or assets, and the associated diversion of
management attention or other related costs or difficulties; our
ability to continue to generate revenue from products sold into
mature markets; our ability to develop, market, and sell new
products; our ability to succeed with our new software offerings;
fluctuations in our revenue due to the project-based timing of
orders from certain customers; unpredictable timing of our revenues
due to the lengthy sales cycle for our products and services and
potential delays in customer completion of projects; our ability to
accurately forecast future demand for our products; delays in
qualifying revisions of existing products; constraints or delays in
the supply of, or quality control issues with, certain materials or
components; difficulties associated with the delivery, quality or
cost of our products from our contract manufacturers or suppliers;
risks related to the outsourcing of manufacturing and international
operations; difficulties associated with our distributors or
resellers; intense competition in our industry and resultant
downward price pressure; rises in inventory levels and inventory
obsolescence; undetected software or hardware errors or defects in
our products; cybersecurity risks; our ability to obtain
appropriate industry certifications or approvals from governmental
regulatory bodies; changes in applicable U.S. and foreign
government laws, regulations, and tariffs; our ability to protect
patents and other proprietary rights and avoid infringement of
others’ proprietary technology rights; issues relating to the
stability of our financial and banking institutions and
relationships; the level of our indebtedness, our ability to
service our indebtedness and the restrictions in our debt
agreements; the impact of rising interest rates; our ability to
attract and retain qualified management; and any additional factors
included in our Report on Form 10-K for the fiscal year ended June
30, 2023, filed with the Securities and Exchange Commission (the
“SEC”) on Sept. 12, 2023, including in the section entitled “Risk
Factors” in Item 1A of Part I of that report; in our Quarterly
Report on Form 10-Q for the fiscal quarter ended Dec. 31, 2023,
filed with the SEC on Feb. 8, 2024, including in the section
entitled “Risk Factors” in Item 1A of Part II of such report; and
in our other public 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.
© 2024 Lantronix Inc. All rights reserved.
Lantronix is a registered trademark.
Lantronix Investor Relations
Contact: Jeremy
WhitakerChief Financial Officerinvestors@lantronix.com
|
|
LANTRONIX, INC. |
UNAUDITED CONDENSED CONSOLIDATED BALANCE
SHEETS |
(In thousands) |
|
|
|
|
|
March 31, |
|
June 30, |
|
|
2024 |
|
|
|
2023 |
|
Assets |
|
|
|
Current assets: |
|
|
|
Cash and cash equivalents |
$ |
24,642 |
|
|
$ |
13,452 |
|
Accounts receivable, net |
|
28,542 |
|
|
|
27,682 |
|
Inventories, net |
|
40,552 |
|
|
|
49,736 |
|
Contract manufacturers' receivables |
|
1,562 |
|
|
|
3,019 |
|
Prepaid expenses and other current assets |
|
2,586 |
|
|
|
2,662 |
|
Total current assets |
|
97,884 |
|
|
|
96,551 |
|
Property and equipment, net |
|
4,409 |
|
|
|
4,629 |
|
Goodwill |
|
27,824 |
|
|
|
27,824 |
|
Intangible assets, net |
|
6,561 |
|
|
|
10,565 |
|
Lease right-of-use assets |
|
10,128 |
|
|
|
11,583 |
|
Other assets |
|
586 |
|
|
|
472 |
|
Total assets |
$ |
147,392 |
|
|
$ |
151,624 |
|
|
|
|
|
Liabilities and stockholders' equity |
|
|
|
Current liabilities: |
|
|
|
Accounts payable |
$ |
13,845 |
|
|
$ |
12,401 |
|
Accrued payroll and related expenses |
|
4,539 |
|
|
|
2,431 |
|
Current portion of long-term debt, net |
|
3,002 |
|
|
|
2,743 |
|
Other current liabilities |
|
22,188 |
|
|
|
28,813 |
|
Total current liabilities |
|
43,574 |
|
|
|
46,388 |
|
Long-term debt, net |
|
13,970 |
|
|
|
16,221 |
|
Other non-current liabilities |
|
11,763 |
|
|
|
11,459 |
|
Total liabilities |
|
69,307 |
|
|
|
74,068 |
|
|
|
|
|
Commitments and contingencies |
|
|
|
|
|
|
|
Stockholders' equity: |
|
|
|
Common stock |
|
4 |
|
|
|
4 |
|
Additional paid-in capital |
|
301,117 |
|
|
|
295,686 |
|
Accumulated deficit |
|
(223,407 |
) |
|
|
(218,505 |
) |
Accumulated other comprehensive income |
|
371 |
|
|
|
371 |
|
Total stockholders' equity |
|
78,085 |
|
|
|
77,556 |
|
Total liabilities and stockholders' equity |
$ |
147,392 |
|
|
$ |
151,624 |
|
|
|
|
|
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, |
|
|
2024 |
|
|
|
2023 |
|
|
|
2023 |
|
|
|
2024 |
|
|
|
2023 |
|
Net revenue |
$ |
41,183 |
|
|
$ |
37,038 |
|
|
$ |
32,964 |
|
|
$ |
111,252 |
|
|
$ |
96,265 |
|
Cost of revenue |
|
24,679 |
|
|
|
22,007 |
|
|
|
18,328 |
|
|
|
65,620 |
|
|
|
53,799 |
|
Gross profit |
|
16,504 |
|
|
|
15,031 |
|
|
|
14,636 |
|
|
|
45,632 |
|
|
|
42,466 |
|
Operating expenses: |
|
|
|
|
|
|
|
|
|
Selling, general and administrative |
|
9,753 |
|
|
|
10,224 |
|
|
|
9,946 |
|
|
|
29,147 |
|
|
|
28,916 |
|
Research and development |
|
5,186 |
|
|
|
4,725 |
|
|
|
5,067 |
|
|
|
15,017 |
|
|
|
14,677 |
|
Restructuring, severance and related charges |
|
350 |
|
|
|
530 |
|
|
|
490 |
|
|
|
900 |
|
|
|
664 |
|
Acquisition-related costs |
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
315 |
|
Fair value remeasurement of earnout consideration |
|
- |
|
|
|
- |
|
|
|
140 |
|
|
|
(9 |
) |
|
|
(533 |
) |
Amortization of intangible assets |
|
1,310 |
|
|
|
1,310 |
|
|
|
1,424 |
|
|
|
4,004 |
|
|
|
4,340 |
|
Total operating expenses |
|
16,599 |
|
|
|
16,789 |
|
|
|
17,067 |
|
|
|
49,059 |
|
|
|
48,379 |
|
Loss from operations |
|
(95 |
) |
|
|
(1,758 |
) |
|
|
(2,431 |
) |
|
|
(3,427 |
) |
|
|
(5,913 |
) |
Interest expense, net |
|
(171 |
) |
|
|
(232 |
) |
|
|
(465 |
) |
|
|
(741 |
) |
|
|
(1,081 |
) |
Other income (loss), net |
|
2 |
|
|
|
(23 |
) |
|
|
(29 |
) |
|
|
(2 |
) |
|
|
(21 |
) |
Loss before income taxes |
|
(264 |
) |
|
|
(2,013 |
) |
|
|
(2,925 |
) |
|
|
(4,170 |
) |
|
|
(7,015 |
) |
Provision (benefit) for income taxes |
|
159 |
|
|
|
580 |
|
|
|
140 |
|
|
|
732 |
|
|
|
312 |
|
Net loss |
$ |
(423 |
) |
|
$ |
(2,593 |
) |
|
$ |
(3,065 |
) |
|
$ |
(4,902 |
) |
|
$ |
(7,327 |
) |
Net loss per share - basic and diluted |
$ |
(0.01 |
) |
|
$ |
(0.07 |
) |
|
$ |
(0.08 |
) |
|
$ |
(0.13 |
) |
|
$ |
(0.20 |
) |
Weighted-average common shares - basic and diluted |
|
37,509 |
|
|
|
37,354 |
|
|
|
36,548 |
|
|
|
37,283 |
|
|
|
36,105 |
|
|
|
|
|
|
|
|
|
|
|
LANTRONIX, INC. |
UNAUDITED RECONCILIATION OF NON-GAAP
ADJUSTMENTS |
(In thousands, except per share data) |
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
Nine Months Ended |
|
March 31, |
|
December 31, |
March 31, |
|
March 31, |
|
|
2024 |
|
|
|
2023 |
|
|
|
2023 |
|
|
|
2024 |
|
|
|
2023 |
|
|
|
|
|
|
|
|
|
|
|
GAAP net loss |
$ |
(423 |
) |
|
$ |
(2,593 |
) |
|
$ |
(3,065 |
) |
|
$ |
(4,902 |
) |
|
$ |
(7,327 |
) |
Non-GAAP adjustments: |
|
|
|
|
|
|
|
|
|
Cost of revenue: |
|
|
|
|
|
|
|
|
|
Share-based compensation |
|
66 |
|
|
|
64 |
|
|
|
47 |
|
|
|
171 |
|
|
|
159 |
|
Employer portion of withholding taxes on stock grants |
|
1 |
|
|
|
1 |
|
|
|
1 |
|
|
|
6 |
|
|
|
13 |
|
Amortization of manufacturing profit in acquired inventory |
|
190 |
|
|
|
189 |
|
|
|
77 |
|
|
|
696 |
|
|
|
181 |
|
Depreciation and amortization |
|
144 |
|
|
|
109 |
|
|
|
116 |
|
|
|
339 |
|
|
|
364 |
|
Total adjustments to cost of revenue |
|
401 |
|
|
|
363 |
|
|
|
241 |
|
|
|
1,212 |
|
|
|
717 |
|
Selling, general and administrative: |
|
|
|
|
|
|
|
|
|
Share-based compensation |
|
1,337 |
|
|
|
1,628 |
|
|
|
1,293 |
|
|
|
4,238 |
|
|
|
4,132 |
|
Employer portion of withholding taxes on stock grants |
|
21 |
|
|
|
10 |
|
|
|
25 |
|
|
|
68 |
|
|
|
167 |
|
Depreciation and amortization |
|
352 |
|
|
|
338 |
|
|
|
280 |
|
|
|
1,024 |
|
|
|
695 |
|
Total adjustments to selling, general and administrative |
|
1,710 |
|
|
|
1,976 |
|
|
|
1,598 |
|
|
|
5,330 |
|
|
|
4,994 |
|
Research and development: |
|
|
|
|
|
|
|
|
|
Share-based compensation |
|
469 |
|
|
|
484 |
|
|
|
388 |
|
|
|
1,381 |
|
|
|
1,090 |
|
Employer portion of withholding taxes on stock grants |
|
9 |
|
|
|
5 |
|
|
|
5 |
|
|
|
27 |
|
|
|
29 |
|
Depreciation and amortization |
|
76 |
|
|
|
52 |
|
|
|
37 |
|
|
|
236 |
|
|
|
164 |
|
Total adjustments to research and development |
|
554 |
|
|
|
541 |
|
|
|
430 |
|
|
|
1,644 |
|
|
|
1,283 |
|
Restructuring, severance and related charges |
|
350 |
|
|
|
530 |
|
|
|
490 |
|
|
|
900 |
|
|
|
664 |
|
Acquisition related costs |
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
315 |
|
Fair value remeasurement of earnout consideration |
|
- |
|
|
|
- |
|
|
|
140 |
|
|
|
(9 |
) |
|
|
(533 |
) |
Amortization of purchased intangible assets |
|
1,310 |
|
|
|
1,310 |
|
|
|
1,424 |
|
|
|
4,004 |
|
|
|
4,340 |
|
Litigation settlement cost |
|
- |
|
|
|
- |
|
|
|
250 |
|
|
|
- |
|
|
|
330 |
|
Total non-GAAP adjustments to operating expenses |
|
3,924 |
|
|
|
4,357 |
|
|
|
4,332 |
|
|
|
11,869 |
|
|
|
11,393 |
|
Interest expense, net |
|
171 |
|
|
|
232 |
|
|
|
465 |
|
|
|
741 |
|
|
|
1,081 |
|
Other (income) expense, net |
|
(2 |
) |
|
|
23 |
|
|
|
29 |
|
|
|
2 |
|
|
|
21 |
|
Provision for income taxes |
|
159 |
|
|
|
580 |
|
|
|
140 |
|
|
|
732 |
|
|
|
312 |
|
Total non-GAAP adjustments |
|
4,653 |
|
|
|
5,555 |
|
|
|
5,207 |
|
|
|
14,556 |
|
|
|
13,524 |
|
Non-GAAP net income |
$ |
4,230 |
|
|
$ |
2,962 |
|
|
$ |
2,142 |
|
|
$ |
9,654 |
|
|
$ |
6,197 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP net income per share - diluted |
$ |
0.11 |
|
|
$ |
0.08 |
|
|
$ |
0.06 |
|
|
$ |
0.25 |
|
|
$ |
0.17 |
|
|
|
|
|
|
|
|
|
|
|
Denominator for GAAP net income per share - diluted |
|
37,509 |
|
|
|
37,354 |
|
|
|
36,548 |
|
|
|
37,283 |
|
|
|
36,105 |
|
Non-GAAP adjustment |
|
1,674 |
|
|
|
1,228 |
|
|
|
839 |
|
|
|
1,021 |
|
|
|
1,066 |
|
Denominator for non-GAAP net income per share - diluted |
|
39,183 |
|
|
|
38,582 |
|
|
|
37,387 |
|
|
|
38,304 |
|
|
|
37,171 |
|
|
|
|
|
|
|
|
|
|
|
GAAP cost of revenue |
$ |
24,679 |
|
|
$ |
22,007 |
|
|
$ |
18,328 |
|
|
$ |
65,620 |
|
|
$ |
53,799 |
|
Non-GAAP adjustments to cost of revenue |
|
(401 |
) |
|
|
(363 |
) |
|
|
(241 |
) |
|
|
(1,212 |
) |
|
|
(717 |
) |
Non-GAAP cost of revenue |
|
24,278 |
|
|
|
21,644 |
|
|
|
18,087 |
|
|
|
64,408 |
|
|
|
53,082 |
|
Non-GAAP gross profit |
$ |
16,905 |
|
|
$ |
15,394 |
|
|
$ |
14,877 |
|
|
$ |
46,844 |
|
|
$ |
43,183 |
|
Non-GAAP gross margin |
|
41.0 |
% |
|
|
41.6 |
% |
|
|
45.1 |
% |
|
|
42.1 |
% |
|
|
44.9 |
% |
|
|
|
|
|
|
|
|
|
|
LANTRONIX, INC. |
UNAUDITED NET REVENUES BY PRODUCT LINE AND
REGION |
(In thousands) |
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
Nine Months Ended |
|
March 31, 2024 |
|
December 31, 2023 |
|
March 31, 2023 |
|
March 31, 2024 |
|
March 31, 2023 |
Embedded IoT Solutions |
$ |
12,452 |
|
|
$ |
11,764 |
|
|
$ |
16,055 |
|
|
$ |
35,589 |
|
|
$ |
44,818 |
|
IoT System Solutions |
|
26,789 |
|
|
|
23,022 |
|
|
|
14,034 |
|
|
|
68,847 |
|
|
|
43,568 |
|
Software & Services |
|
1,942 |
|
|
|
2,252 |
|
|
|
2,875 |
|
|
|
6,816 |
|
|
|
7,879 |
|
|
$ |
41,183 |
|
|
$ |
37,038 |
|
|
$ |
32,964 |
|
|
$ |
111,252 |
|
|
$ |
96,265 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
Nine Months Ended |
|
March 31, 2024 |
|
December 31, 2023 |
|
March 31, 2023 |
|
March 31, 2024 |
|
March 31, 2023 |
Americas |
$ |
17,543 |
|
|
$ |
20,601 |
|
|
$ |
19,095 |
|
|
$ |
61,077 |
|
|
$ |
59,713 |
|
EMEA |
|
18,354 |
|
|
|
12,886 |
|
|
|
6,380 |
|
|
|
37,831 |
|
|
|
16,486 |
|
Asia Pacific Japan |
|
5,286 |
|
|
|
3,551 |
|
|
|
7,489 |
|
|
|
12,344 |
|
|
|
20,066 |
|
|
$ |
41,183 |
|
|
$ |
37,038 |
|
|
$ |
32,964 |
|
|
$ |
111,252 |
|
|
$ |
96,265 |
|
|
|
|
|
|
|
|
|
|
|
Lantronix (NASDAQ:LTRX)
Historical Stock Chart
From Apr 2024 to May 2024
Lantronix (NASDAQ:LTRX)
Historical Stock Chart
From May 2023 to May 2024