Exhibit 99.1
Lantronix Reports Results for First Quarter of Fiscal 2024
| · | First Quarter Net Revenue of $33 Million, Down 5 Percent Sequentially and up 4 Percent Year-Over-Year | |
| · | First Quarter GAAP EPS of ($0.05) vs. ($0.05) in the Prior Year | |
| · | First Quarter Non-GAAP EPS of $0.07 vs. $0.07 in the Prior Year |
IRVINE, Calif., Nov. 8, 2023 – Lantronix Inc. (NASDAQ: LTRX), a global provider of secure turnkey solutions for the Industrial Internet of Things (IoT) and the Intelligent IT market, today reported results for its first quarter of fiscal 2024.
Net revenue totaled $33.0 million, down 5 percent sequentially and up 4 percent year-over-year.
GAAP EPS of ($0.05), compared to ($0.05) in the prior year and ($0.05) in the prior quarter.
Non-GAAP EPS of $0.07, compared to $0.07 in the prior year and $0.06 in the prior quarter.
Business Outlook
For fiscal year 2024, the company continues to expect revenue in a range of $175 million to $185 million and non-GAAP EPS in a range of $0.50 to $0.60 per share.
Conference Call and Webcast
Management will host an investor conference call and audio webcast on Wednesday, Nov. 9, 2023, at 2:00 p.m. Pacific Time (5:00 p.m. Eastern Time) to discuss its results for the first quarter of fiscal 2024 that ended Sept. 30, 2023. 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 Q1 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 Nov. 8, 2023, at the Lantronix website. A telephonic replay will also be available through Nov. 15, 2023, by dialing 1-877-344-7529 (US) or 1-412-317-0088 (international) and entering passcode 3340021.
About Lantronix
Lantronix Inc. is a global Industrial and Enterprise Internet of Things (IoT) provider of solutions that target high-growth applications in specific vertical markets, including Smart Grid, Intelligent Transportation, Smart Cities and AI Data Centers. Lantronix’s history in networking and video processing as well as its leading-edge applications include Intelligent Substations infrastructure, Infotainment systems and Video Surveillance, supplemented with comprehensive Out of Band Management (OOB) solutions for Cloud and Edge Computing.
Lantronix’s solutions empower companies to achieve success in the growing IoT and OOB markets by delivering customizable solutions that address each layer of the IoT Stack, including Collect, Connect, Compute, Control and Comprehend. For more information, visit the Lantronix website.
Learn more at the Lantronix blog, which features industry discussion and updates. Follow Lantronix on Twitter, view its YouTube video library or connect on LinkedIn.
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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.
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Forward-Looking Statements
This news release contains forward-looking statements, including statements concerning our revenue and earnings expectations for fiscal 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, or other causes; our ability to successfully convert our backlog and current demand; the impact of the COVID-19 pandemic or other pandemic or similar outbreak, including the emergence of new more contagious and/or vaccine-resistant strains, on our business, employees, supply and distribution chains and the global economy; 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, 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.
© 2023 Lantronix, Inc. All rights reserved. Lantronix is a registered trademark.
Lantronix Investor Relations Contact:
Jeremy Whitaker
Chief Financial Officer
investors@lantronix.com
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LANTRONIX, INC.
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
| September 30, | June 30, | |||||||
| 2023 | 2023 | |||||||
| Assets | ||||||||
| Current assets: | ||||||||
| Cash and cash equivalents | $ | 19,479 | $ | 13,452 | ||||
| Accounts receivable, net | 30,105 | 27,682 | ||||||
| Inventories, net | 45,796 | 49,736 | ||||||
| Contract manufacturers' receivables | 630 | 3,019 | ||||||
| Prepaid expenses and other current assets | 2,895 | 2,662 | ||||||
| Total current assets | 98,905 | 96,551 | ||||||
| Property and equipment, net | 4,926 | 4,629 | ||||||
| Goodwill | 27,824 | 27,824 | ||||||
| Purchased intangible assets, net | 9,181 | 10,565 | ||||||
| Lease right-of-use assets | 11,102 | 11,583 | ||||||
| Other assets | 461 | 472 | ||||||
| Total assets | $ | 152,399 | $ | 151,624 | ||||
| Liabilities and stockholders' equity | ||||||||
| Current liabilities: | ||||||||
| Accounts payable | $ | 9,149 | $ | 12,401 | ||||
| Accrued payroll and related expenses | 2,539 | 2,431 | ||||||
| Current portion of long-term debt, net | 3,002 | 2,743 | ||||||
| Other current liabilities | 34,062 | 28,813 | ||||||
| Total current liabilities | 48,752 | 46,388 | ||||||
| Long-term debt, net | 15,471 | 16,221 | ||||||
| Other non-current liabilities | 11,185 | 11,459 | ||||||
| Total liabilities | 75,408 | 74,068 | ||||||
| Commitments and contingencies (Note 9) | ||||||||
| Stockholders' equity: | ||||||||
| Common stock | 4 | 4 | ||||||
| Additional paid-in capital | 297,007 | 295,686 | ||||||
| Accumulated deficit | (220,391 | ) | (218,505 | ) | ||||
| Accumulated other comprehensive income | 371 | 371 | ||||||
| Total stockholders' equity | 76,991 | 77,556 | ||||||
| Total liabilities and stockholders' equity | $ | 152,399 | $ | 151,624 | ||||
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LANTRONIX, INC.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
| Three Months Ended | ||||||||||||
| September 30, | June 30, | September 30, | ||||||||||
| 2023 | 2023 | 2022 | ||||||||||
| Net revenue | $ | 33,031 | $ | 34,924 | $ | 31,795 | ||||||
| Cost of revenue | 18,934 | 21,126 | 17,759 | |||||||||
| Gross profit | 14,097 | 13,798 | 14,036 | |||||||||
| Operating expenses: | ||||||||||||
| Selling, general and administrative | 9,170 | 8,032 | 9,157 | |||||||||
| Research and development | 5,106 | 4,948 | 4,526 | |||||||||
| Restructuring, severance and related charges | 20 | 29 | 92 | |||||||||
| Acquisition-related costs | – | – | 213 | |||||||||
| Fair value remeasurement of earnout consideration | (9 | ) | 86 | – | ||||||||
| Amortization of purchased intangible assets | 1,384 | 1,464 | 1,419 | |||||||||
| Total operating expenses | 15,671 | 14,559 | 15,407 | |||||||||
| Loss from operations | (1,574 | ) | (761 | ) | (1,371 | ) | ||||||
| Interest expense, net | (338 | ) | (404 | ) | (262 | ) | ||||||
| Other income (loss), net | 19 | (52 | ) | 34 | ||||||||
| Loss before income taxes | (1,893 | ) | (1,217 | ) | (1,599 | ) | ||||||
| Provision (benefit) for income taxes | (7 | ) | 436 | 54 | ||||||||
| Net loss | $ | (1,886 | ) | $ | (1,653 | ) | $ | (1,653 | ) | |||
| Net loss per share - basic and diluted | $ | (0.05 | ) | $ | (0.05 | ) | $ | (0.05 | ) | |||
| Weighted-average common shares - basic and diluted | 36,982 | 36,719 | 35,406 | |||||||||
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LANTRONIX, INC.
UNAUDITED RECONCILIATION OF NON-GAAP ADJUSTMENTS
(In thousands, except per share data)
| Three Months Ended | ||||||||||||
| September 30, | June 30, | September 30, | ||||||||||
| 2023 | 2023 | 2022 | ||||||||||
| GAAP net loss | $ | (1,886 | ) | $ | (1,653 | ) | $ | (1,653 | ) | |||
| Non-GAAP adjustments: | ||||||||||||
| Cost of revenue: | ||||||||||||
| Share-based compensation | 41 | (1 | ) | 51 | ||||||||
| Employer portion of withholding taxes on stock grants | 4 | – | 12 | |||||||||
| Amortization of manufacturing profit in acquired inventory | 317 | 44 | 24 | |||||||||
| Depreciation and amortization | 86 | 102 | 130 | |||||||||
| Total adjustments to cost of revenue | 448 | 145 | 217 | |||||||||
| Selling, general and administrative: | ||||||||||||
| Share-based compensation | 1,273 | 414 | 1,405 | |||||||||
| Employer portion of withholding taxes on stock grants | 37 | 14 | 132 | |||||||||
| Depreciation and amortization | 334 | 327 | 155 | |||||||||
| Total adjustments to selling, general and administrative | 1,644 | 755 | 1,692 | |||||||||
| Research and development: | ||||||||||||
| Share-based compensation | 428 | 414 | 332 | |||||||||
| Employer portion of withholding taxes on stock grants | 13 | 5 | 22 | |||||||||
| Depreciation and amortization | 108 | 84 | 64 | |||||||||
| Total adjustments to research and development | 549 | 503 | 418 | |||||||||
| Restructuring, severance and related charges | 20 | 29 | 92 | |||||||||
| Acquisition related costs | – | – | 213 | |||||||||
| Fair value remeasurement of earnout consideration | (9 | ) | 86 | – | ||||||||
| Amortization of purchased intangible assets | 1,384 | 1,464 | 1,419 | |||||||||
| Total non-GAAP adjustments to operating expenses | 3,588 | 2,837 | 3,834 | |||||||||
| Interest expense, net | 338 | 404 | 262 | |||||||||
| Other (income) expense, net | (19 | ) | 52 | (34 | ) | |||||||
| Provision (benefit) for income taxes | (7 | ) | 436 | 54 | ||||||||
| Total non-GAAP adjustments | 4,348 | 3,874 | 4,333 | |||||||||
| Non-GAAP net income | $ | 2,462 | $ | 2,221 | $ | 2,680 | ||||||
| Non-GAAP net income per share - diluted | $ | 0.07 | $ | 0.06 | $ | 0.07 | ||||||
| Denominator for GAAP net income per share - diluted | 36,982 | 36,719 | 35,406 | |||||||||
| Non-GAAP adjustment | 693 | 548 | 1,777 | |||||||||
| Denominator for non-GAAP net income per share - diluted | 37,675 | 37,267 | 37,183 | |||||||||
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LANTRONIX, INC.
UNAUDITED NET REVENUES BY PRODUCT LINE AND REGION
(In thousands)
| Three Months Ended | ||||||||||||
| September 30, 2023 | June 30, 2023 | September 30, 2022 | ||||||||||
| Embedded IoT Solutions | $ | 11,373 | $ | 18,818 | $ | 15,095 | ||||||
| IoT System Solutions | 19,036 | 13,928 | 14,621 | |||||||||
| Software & Services | 2,622 | 2,178 | 2,079 | |||||||||
| $ | 33,031 | $ | 34,924 | $ | 31,795 | |||||||
| Three Months Ended | ||||||||||||
| September 30, 2023 | June 30, 2023 | September 30, 2022 | ||||||||||
| Americas | $ | 22,933 | $ | 18,844 | $ | 20,930 | ||||||
| EMEA | 6,591 | 6,800 | 5,201 | |||||||||
| Asia Pacific Japan | 3,507 | 9,280 | 5,664 | |||||||||
| $ | 33,031 | $ | 34,924 | $ | 31,795 | |||||||
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