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CST: 16/07/2019 09:05:49   

Lantronix Reports Third Quarter Fiscal 2019 Net Revenue of $12.3M

81 Days ago

Achieves $0.04 of GAAP Earnings per Share & $0.05 of Non-GAAP Earnings per Share

IRVINE, Calif., April 25, 2019 (GLOBE NEWSWIRE) -- Lantronix, Inc. (NASDAQ: LTRX), a global provider of secure data access and management solutions for the industrial Internet of Things (IoT) today reported results for the third quarter fiscal 2019 that ended March 31, 2019.

Financial Highlights

  • Net revenue of $12.3 million, an increase of 6% from the third quarter of fiscal 2018
  • Net revenue growth of 10% for the nine months ended March 31, 2019
  • Gross profit margin of 57.4%, compared with 56.8% for the third quarter of fiscal 2018
  • GAAP net income of $857,000, or $0.04 per share, compared to GAAP net income of $344,000, or $0.02 per share for the third quarter of fiscal 2018, a 150% increase in GAAP earnings
  • Non-GAAP net income of $1,295,000, or $0.05 per share, compared to non-GAAP net income of $767,000, or $0.04 per share for the third quarter of fiscal 2018, a 69% increase in non-GAAP earnings

Operational and Product Highlights

  • Paul Pickle joined the Company as its new President and CEO in April 2019.  Prior to joining Lantronix, Mr. Pickle served as the President and COO of the Microsemi Corporation, a leading provider of semiconductor and system solutions, from November 2013 until Microsemi was acquired by Microchip Technology Inc. in May 2018 for an enterprise value of $10.15 billion. 
  • In March, the company announced a new release of its award winning ConsoleFlow™, a centralized IT infrastructure management and monitoring software optimized for out-of-band networks, at Cisco Live Australia.
  • In February, the company introduced its latest wireless embedded IoT gateway innovation for the industrial IoT applications, the xPico® 270, at Embedded World in Germany.
  • In January, the company expanded its distribution agreement with Ingram Micro.  Under the terms of the new agreement, Ingram Micro is now providing advanced logistics, product delivery, and distribution services for Lantronix products in China.

“I am pleased with our third quarter results and delivering both sequential and year-over-year revenue growth with increased gross and operating margins,” said Jeremy Whitaker, Lantronix CFO. “Furthermore, I would like to welcome Paul Pickle as our new president and CEO. I look forward to how Paul’s leadership and experience will help drive the execution of the Company’s growth strategy.”

“I am excited to be joining Lantronix. Based on the Company’s recent results, its talented team, and innovative products, I believe the Company is well positioned to take advantage of future growth opportunities,” said Paul Pickle, Lantronix CEO.

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 of fiscal 2019 that ended March 31, 2019. 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 2019 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 April 25, 2019 by dialing 1-877-344-7529 (US) or 1-412-317-0088 (international) and entering passcode 10130426.

About Lantronix 
Lantronix, Inc. is a global provider of secure data access and management solutions for the 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 our 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.

Lantronix is headquartered in Irvine, California. For more information, visit www.lantronix.com.
Learn more on 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.

Lantronix Investor Relations Contact:  
Shahram Mehraban
VP, Marketing
investors@lantronix.com
949-453-7175

© 2019 Lantronix, Inc. All rights reserved. Lantronix and XPort are registered trademarks, and ConsoleFlow is a trademark, of Lantronix, Inc.

 
LANTRONIX, INC.  
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
  (In thousands)  
 
    March 31,   June 30,
      2019       2018  
Assets        
Current assets:        
Cash and cash equivalents   $   18,212     $   9,568  
Accounts receivable, net       8,351         4,244  
Inventories, net       9,809         8,439  
Contract manufacturers' receivable        506         649  
Prepaid expenses and other current assets       817         370  
Total current assets       37,695         23,270  
Property and equipment, net       1,353         1,036  
Goodwill       9,488         9,488  
Other assets       53         61  
Total assets   $   48,589     $   33,855  
         
Liabilities and stockholders' equity        
Current liabilities:        
Accounts payable   $   5,012     $   3,942  
Accrued payroll and related expenses       1,808         2,808  
Warranty reserve       110         99  
Other current liabilities       3,956         2,877  
Total current liabilities       10,886         9,726  
Other non-current liabilities       228         316  
Total liabilities       11,114         10,042  
         
Commitments and contingencies        
         
Stockholders' equity:        
Common stock       2         2  
Additional paid-in capital       225,024         212,995  
Accumulated deficit       (187,922 )       (189,555 )
Accumulated other comprehensive income       371         371  
Total stockholders' equity       37,475         23,813  
Total liabilities and stockholders' equity   $   48,589     $   33,855  
         

 

 
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,    
     2019     2018      2018     2019     2018 
Net revenue   $   12,344     $   12,114     $   11,601     $   36,737     $   33,543  
Cost of revenue       5,254         5,453         5,017         16,245         15,051  
Gross profit       7,090         6,661         6,584         20,492         18,492  
Operating expenses:                    
Selling, general and administrative       3,867         4,159         4,241         12,498         12,400  
Research and development       2,385         2,279         1,964         6,962         6,059  
Total operating expenses       6,252         6,438         6,205         19,460         18,459  
Income (loss) from operations       838         223         379         1,032         33  
Interest income (expense), net       91         60         (5 )       147         (14 )
Other income (expense), net       (12 )       8         (1 )       (14 )       1  
Income (loss) before income taxes       917         291         373         1,165         20  
Provision for income taxes       60         14         29         114         92  
Net income (loss)   $   857     $   277     $   344     $   1,051     $   (72 )
Net income (loss) per share - basic   $   0.04     $   0.01     $   0.02     $   0.05     $   (0.00 )
Net income (loss) per share - diluted   $   0.04     $   0.01     $   0.02     $   0.05     $   (0.00 )
Weighted-average common shares - basic       22,270         22,091         18,210         21,237         18,050  
Weighted-average common shares - diluted       23,304         23,442         19,118         22,632         18,050  
                     

 

 

 
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,    
     2019     2018     2018     2019     2018 
                     
GAAP net income (loss)   $   857     $   277     $   344     $   1,051     $   (72 )
Non-GAAP adjustments:                    
Cost of revenue:                    
Share-based compensation       22         23         14         62         40  
Depreciation and amortization       51         45         53         144         168  
Total adjustments to cost of revenue       73         68         67         206         208  
                     
                     
Selling, general and administrative:                    
Share-based compensation       213         337         237         950         688  
Employer portion of withholding taxes on stock grants       4         2         4         12         9  
Depreciation and amortization       50         48         47         144         138  
Total adjustments to selling, general and administrative       267         387         288         1,106         835  
Research and development:                    
Share-based compensation       96         91         44         248         149  
Employer portion of withholding taxes on stock grants       -          -          -          -          1  
Depreciation and amortization       21         21         10         53         30  
Total adjustments to research and development       117         112         54         301         180  
Severance and related charges       -          -          (21 )       323         506  
Total non-GAAP adjustments to operating expenses       384         499         321         1,730         1,521  
Interest (income) expense, net       (91 )       (60 )       5         (147 )       14  
Other (income) expense, net       12         (8 )       1         14         (1 )
Provision for income taxes       60         14         29         114         92  
Total non-GAAP adjustments       438         513         423         1,917         1,834  
Non-GAAP net income    $   1,295     $   790     $   767     $   2,968     $   1,762  
                     
                     
                     
Non-GAAP net income per share - diluted   $   0.05     $   0.03     $   0.04     $   0.13     $   0.09  
                     
Denominator for GAAP net income (loss) per share - diluted       23,304         23,442         19,118         22,632         18,050  
Non-GAAP adjustment       893         824         541         655         1,420  
Denominator for non-GAAP net income per share - diluted       24,197         24,266         19,659         23,287         19,470  
                     
                     
GAAP operating expenses   $   6,252     $   6,438     $   6,205     $   19,460     $   18,459  
Non-GAAP adjustments to operating expenses       (384 )       (499 )       (321 )       (1,730 )       (1,521 )
Non-GAAP operating expenses   $   5,868     $   5,939     $   5,884     $   17,730     $   16,938  
                     


 
LANTRONIX, INC.
UNAUDITED NET REVENUES BY PRODUCT LINE AND REGION
(In thousands)
                   
    Three Months Ended       Nine Months Ended  
    March 31,       December 31,       March 31,       March 31,       March 31,  
   2019    2018    2018    2019    2018
IoT $   8,935   $   9,070   $   9,235   $   26,972   $   25,654
IT Management     3,210       2,888       1,964       9,199       6,971
Other     199       156       402       566       918
  $   12,344   $   12,114   $   11,601   $   36,737   $   33,543
                 
                 
                 
    Three Months Ended       Nine Months Ended  
  March 31,   December 31,   March 31,   March 31,   March 31,
   2019    2018    2018    2019    2018
Americas $   6,866   $   6,182   $   5,832   $   19,962   $   17,821
EMEA     3,757       4,080       4,055       11,357       10,391
APJ     1,721       1,852       1,714       5,418       5,331
  $   12,344   $   12,114   $   11,601   $   36,737   $   33,543
                 
                 

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