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Lantronix Reports Second Quarter Fiscal Year 2013 Financial Results(Marketwire Via Acquire Media NewsEdge) IRVINE, CA -- (Marketwire) -- 01/31/13 -- Lantronix, Inc. (the "company") (NASDAQ: LTRX), a leading global provider of smart M2M connectivity solutions, today reported results for its second fiscal quarter ended December 31, 2012. Financial Highlights Net revenue of $12.2 million Gross profit as a percentage of net revenue of 49.6% GAAP net loss of $(412,000), or ($0.03) per share Non-GAAP net income of $70,000, or breakeven per share Operational Highlights In October 2012, the company entered into an agreement with Ingram Micro Europe, a division of Ingram Micro Inc. (NYSE: IM), the largest global wholesale provider of technology products and supply chain management services, under which Ingram Micro Europe will provide advanced logistics, product delivery and distribution services for Lantronix throughout Europe. In November 2012, the company announced a sales and marketing partnership agreement with DataVision, New York's largest independent computer and video retailer, under which DataVision agreed to market and sell the Lantronix award-winning xPrintServer™ family of mobile printing solutions both online and through DataVision's flagship store. In November 2012, OKI Data Americas, a leading provider of print management solutions, expanded its relationship with Lantronix to become the first printer manufacturer to resell the Lantronix xPrintServer mobile printing solution. In January 2013, the company entered into an agreement with Arrow Electronics, Inc. (NYSE: ARW), to extend Arrow's product sales programs, product delivery and distribution services for Lantronix throughout the Asia-Pacific (APAC) region. Product Highlights In October 2012, the company began shipping the xDirect™ device server -- a compact serial-to-Ethernet device server that provides quick and easy connectivity to virtually any device or machine with a serial interface. In November 2012, the company announced the launch and worldwide availability of its new vSLM™ -- the Virtual Secure Lantronix Management Appliance -- a software solution designed to enable IT (information technology) managers to seamlessly integrate and manage multiple pieces of IT equipment anywhere in the enterprise. In November 2012, the company launched and began shipping the xPrintServer -- Office Edition, an enterprise version of its award-winning mobile printing solution. "Our operational and financial results for the quarter ended December 31, 2012 reflect the continued progress we achieved in executing on our strategic plan and marked the fourth consecutive quarter of non-GAAP profitability," said Lantronix CEO Kurt Busch. "During the quarter, we continued to expand our distribution and sales relationships worldwide, launched three new products, and enhanced Lantronix' visibility in the marketplace through increased marketing efforts." Financial Results for the Second Quarter of Fiscal 2013 Ended December 31, 2012 Net revenue was $12.2 million for the second quarter of fiscal 2013, an increase of $1.7 million or 16%, compared to $10.5 million for the second quarter of fiscal 2012 and an increase of $1.0 million or 9%, compared to $11.2 million for the first quarter of fiscal 2013. In large part, the sequential and year-over-year revenue growth was due to increased unit sales of our xPrintServer and SLC console server product families. Gross profit as a percentage of net revenue was 49.6% for the second quarter of fiscal 2013, compared to 48.2% for the second quarter of fiscal 2012 and 48.8% for the first quarter of fiscal 2013. Operating expenses were $6.4 million for the second quarter of fiscal 2013 compared to $6.4 million for the second quarter of fiscal 2012 and increased by $0.5 million or 9%, compared to $5.9 million for the first quarter of fiscal 2013. The sequential change in operating expenses was primarily due to an increase in selling, general and administrative expenses related to a marketing plan we initiated in November 2012 to drive sales growth and brand awareness for the xPrintServer product family. GAAP net loss for the second quarter of fiscal 2013 was $(412,000), or ($0.03) per share, compared to a GAAP net loss of $(1.4 million), or ($0.13) per share, for the second quarter of fiscal 2012 and a GAAP net loss of $(430,000), or ($0.03) per share, for the first quarter of fiscal 2013. Non-GAAP net income for the second quarter of fiscal 2013 was $70,000, or $0.00 per share compared to non-GAAP net loss of $(629,000) or $(0.06) per share for the second quarter of fiscal 2012 and non-GAAP net income of $48,000, or $0.00 per share, for the first quarter of fiscal 2013. Cash and cash equivalents as of December 31, 2012 were $8.5 million, compared to $11.4 million as of June 30, 2012. The decrease in cash was primarily due to an increase in inventory from $6.0 million as of June 30, 2012 to $9.7 million as of December 31, 2012 to support buffer stock and anticipated customer demand. Conference Call and Webcast Lantronix will host a conference call and webcast today at 2:00 p.m. Pacific Time (5:00 p.m. ET) to discuss its second quarter fiscal year 2013 financial results. Those wishing to participate in the live call should dial 866-700-7477 (international dial-in 617-213-8840) using the passcode 31619690. A telephone replay of the call will be available through February 7, 2013 by dialing (888) 286-8010 (international dial-in 617-801-6888) and entering passcode 72135803. About Lantronix Lantronix, Inc. (NASDAQ: LTRX) is a global leader of secure communication technologies that simplify access and communication with and between virtually any electronic device. Our smart connectivity solutions enable sharing data between devices and applications to empower businesses to make better decisions based on real-time information, and gain a competitive advantage by generating new revenue streams, improving productivity and increasing efficiency and profitability. Easy to integrate and deploy, Lantronix products remotely and securely connect electronic equipment via networks and the Internet. Founded in 1989, Lantronix serves some of the largest medical, security, industrial and building automation, transportation, retail/POS, financial, government, consumer electronics/appliances, IT/data center and pro-AV/signage entities in the world. The company's headquarters are located in Irvine, California. For more information, visit www.lantronix.com. The Lantronix blog, http://www.lantronix.com/blog, features industry discussion and updates. 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. 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 to those financial statements 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. Management believes that non-GAAP operating expenses, non-GAAP net income (loss) and non-GAAP net income (loss) per share are important measures of the company's business. 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. Non-GAAP operating expenses consist of operating expenses excluding (i) share-based compensation and related payroll taxes (ii) depreciation and amortization, and (iii) restructuring charges. Non-GAAP net income (loss) consists of net income (loss) excluding (i) non-GAAP adjustments to operating expenses, (ii) interest income (expense), (iii) other income (expense), and (iv) income tax provision (benefit). Non-GAAP net income (loss) per share is calculated by dividing non-GAAP net income (loss) by non-GAAP weighted-average shares outstanding (diluted). For purposes of calculating non-GAAP net income (loss) per share, 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. Forward-Looking Statements This news release contains forward-looking statements, including statements concerning our future business plans, future financial position, future results of operations and future product development strategies and schedules. These forward-looking statements are based on current management expectations and are subject to risks and uncertainties that could cause actual reported results and outcomes to differ materially from those expressed in the forward-looking statements. Factors that could cause our expectations and reported results to vary, include, but are not limited to: final accounting adjustments and results; quarterly fluctuations in operating results; our ability to identify and profitably develop new products that will be attractive to our target markets, including products in our device networking business and the timing and success of new product introductions; changing market conditions and competitive landscape; market acceptance of our products by our customers; pricing trends; actions by competitors; future revenues and margins; changes in the cost or availability of critical components; unusual or unexpected expenses; and cash usage including cash used for product development or strategic transactions; and other factors that may affect financial performance. For a more detailed discussion of these and other risks and uncertainties, see our Annual Report on Form 10-K for the year ended June 30, 2012 and subsequent Reports on Forms 10-Q and 8-K. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof, and the company undertakes no obligation to update these forward-looking statements to reflect subsequent events or circumstances. If the company does update or correct one or more of these forward-looking statements, investors and others should not conclude that the company will make additional updates or corrections. © 2013 Lantronix, Inc. Lantronix is a registered trademark, and vSLM, xDirect and xPrintServer are trademarks of Lantronix, Inc. All other trademarks and trade names are the property of their respective holders. Specifications subject to change without notice. All rights reserved. LANTRONIX, INC. UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS (In thousands) Change December 31, June 30, -------------- 2012 2012 $ % ------------ ------------ ------- ----- Assets Current assets: Cash and cash equivalents $ 8,452 $ 11,374 $(2,922) -26% Accounts receivable, net 2,348 2,674 (326) -12% Contract manufacturers' receivable 704 622 82 13% Inventories, net 9,694 5,955 3,739 63% Prepaid expenses and other current assets 598 549 49 9% Deferred tax assets 657 657 - ------------ ------------ ------- Total current assets 22,453 21,831 622 3% Property and equipment, net 1,426 1,605 (179) -11% Goodwill 9,488 9,488 - 0% Other assets 79 87 (8) -9% ------------ ------------ ------- Total assets $ 33,446 $ 33,011 $ 435 1% ============ ============ ======= Liabilities and stockholders' equity Current liabilities: Accounts payable $ 5,126 $ 3,563 $ 1,563 44% Accrued payroll and related expenses 1,466 2,100 (634) -30% Warranty reserve 222 232 (10) -4% Short-term debt 500 667 (167) -25% Other current liabilities 3,615 3,342 273 8% ------------ ------------ ------- Total current liabilities 10,929 9,904 1,025 10% ------------ ------------ ------- Non-current liabilities: Long-term liabilities 281 303 (22) -7% Long-term capital lease obligations 78 48 30 63% Long-term debt - 167 Deferred tax liabilities 657 657 - 0% ------------ ------------ ------- Total non-current liabilities 1,016 1,175 (159) -14% ------------ ------------ ------- Total liabilities 11,945 11,079 866 8% ------------ ------------ ------- Commitments and contingencies Stockholders' equity: Common stock 1 1 - 0% Additional paid-in capital 203,460 203,049 411 0% Accumulated deficit (182,359) (181,517) (842) 0% Accumulated other comprehensive income 399 399 - 0% ------------ ------------ ------- Total stockholders' equity 21,501 21,932 (431) -2% ------------ ------------ ------- Total liabilities and stockholders' equity $ 33,446 $ 33,011 $ 435 1% ============ ============ ======= Check figure - - Total receivables 3,052 3,296 (244) -7% Working capital 11,524 11,927 (403) -3% LANTRONIX, INC. Unaudited Consolidated Statements of Operations (In thousands, except per share data) Three Months Ended Six Months Ended ------------------------------------- ---------------- December September December 31, 30, 31, December 31, ----------- ----------- ----------- ---------------- 2012 2012 2011 2012 2011 ----------- ----------- ----------- ------- ------- Net revenue (1) $ 12,162 $ 11,202 $ 10,452 $23,364 $21,636 Cost of revenue 6,130 5,730 5,411 11,860 11,293 ----------- ----------- ----------- ------- ------- Gross profit 6,032 5,472 5,041 11,504 10,343 ----------- ----------- ----------- ------- ------- Operating expenses: Selling, general and administrative 4,719 4,268 4,441 8,987 9,405 Research and development 1,665 1,609 1,646 3,274 3,341 Restructuring charges - 269 - 269 Amortization of purchased intangible assets - - 18 - 36 ----------- ----------- ----------- ------- ------- Total operating expenses 6,384 5,877 6,374 12,261 13,051 ----------- ----------- ----------- ------- ------- Loss from operations (352) (405) (1,333) (757) (2,708) Interest expense, net (16) (15) (23) (31) (50) Other expense, net (23) 5 (8) (18) (37) ----------- ----------- ----------- ------- ------- Loss before income taxes (391) (415) (1,364) (806) (2,795) Provision for income taxes 21 15 13 36 26 ----------- ----------- ----------- ------- ------- Net loss and comprehensive loss $ (412) $ (430) $ (1,377) $ (842) $(2,821) =========== =========== =========== ======= ======= Net loss per share (basic and diluted) $ (0.03) $ (0.03) $ (0.13) $ (0.06) $ (0.27) =========== =========== =========== ======= ======= Weighted-average common shares (basic and diluted) 14,578 14,558 10,581 14,568 10,571 =========== =========== =========== ======= ======= Net revenue from related parties $ 381 $ 292 $ 174 $ 673 $ 411 =========== =========== =========== ======= ======= (1) Includes net revenue from related parties LANTRONIX, INC. Unaudited Reconciliation of Non-GAAP Adjustments (In thousands, except per share data) Three Months Three Months Ended Six Months Ended 30-Sep-12 ----------------------------- ---------------- ------- December September December 31, 30, 31, December 31, -------- --------- -------- ---------------- ------- 2012 2012 2011 2012 2011 $ -------- --------- -------- ------- ------- ------- GAAP net loss $ (412) $ (430) $ (1,377) $ (842) $(2,821) $ (430) -------- --------- -------- ------- ------- Non-GAAP adjustments: Cost of revenue: Share-based compensation 10 11 9 21 22 11 Depreciation and amortization 103 99 99 202 194 99 -------- --------- -------- ------- ------- ------- Total adjustments to cost of revenue 113 110 108 223 216 110 -------- --------- -------- ------- ------- ------- Selling, general and adminstrative: Costs associated with the investigation - - - - 108 - Consulting fees for former CEO and CFO - - - - 153 - Share-based compensation 141 146 113 287 194 146 Employer portion of withholding taxes on stock grants - 1 - 1 2 1 Depreciation and amortization 110 116 118 226 248 116 -------- --------- -------- ------- ------- ------- Total adjustments to selling, general and administrative 251 263 231 514 705 263 -------- --------- -------- ------- ------- ------- Research and development: Share-based compensation 55 74 71 129 137 74 Employer portion of withholding taxes on stock grants - 2 - 2 3 2 Depreciation and amortization 3 4 7 7 16 4 -------- --------- -------- ------- ------- ------- Total adjustments to research and development 58 80 78 138 156 80 -------- --------- -------- ------- ------- ------- Restructuring charges - - 269 - 269 - Amortization of purchased intangible assets - - 18 - 36 - -------- --------- -------- ------- ------- ------- Total non-GAAP adjustments to operating expenses 309 343 596 652 1,166 343 -------- --------- -------- ------- ------- ------- Interest expense, net 16 15 23 31 50 15 Other expense, net 23 (5) 8 18 37 (5) Provision for income taxes 21 15 13 36 26 15 -------- --------- -------- ------- ------- ------- Total non-GAAP adjustments 482 478 748 960 1,495 478 -------- --------- -------- ------- ------- ------- Non-GAAP net income (loss) $ 70 $ 48 $ (629) $ 118 $(1,326) $ 48 ======== ========= ======== ======= ======= ======= Non-GAAP net income (loss) per share (diluted) $ 0.00 $ 0.00 $ (0.06) $ 0.01 $ (0.13) $ 0.00 ======== ========= ======== ======= ======= ======= Denominator for GAAP net income (loss) per share (diluted) 14,578 14,558 10,581 14,568 10,571 14,558 Non-GAAP adjustment 50 92 - 92 - 92 -------- --------- -------- ------- ------- ------- Denominator for non-GAAP net income (loss) per share (diluted) 14,628 14,650 10,581 14,660 10,571 14,650 ======== ========= ======== ======= ======= ======= GAAP operating expenses $ 6,384 $ 5,877 $ 6,374 $12,261 $13,051 $ 5,877 Non-GAAP adjustments to operating expenses (309) (343) (596) (652) (1,166) (343) -------- --------- -------- ------- ------- ------- Non-GAAP operating expenses $ 6,075 $ 5,534 $ 5,778 $11,609 $11,885 $ 5,534 ======== ========= ======== ======= ======= ======= LANTRONIX, INC. Unaudited Net Revenues by Product Line and Region (In thousands, except percentages) Three Months Ended December 31, ---------------------------------- Change % of Net % of Net ------------ 2012 Revenue 2011 Revenue $ % ------- -------- ------- -------- ------ ----- Embedded device enablement $ 5,546 45.6% $ 4,994 47.8% $ 552 11.1% External device enablement 3,480 28.6% 3,349 32.0% 131 3.9% Device management 3,136 25.8% 2,109 20.2% 1,027 48.7% ------- -------- ------- -------- ------ Net revenue $12,162 100.0% $10,452 100.0% $1,710 16.4% ======= ======== ======= ======== ====== Six Months Ended December 31, ---------------------------------- Change % of Net % of Net ------------ 2012 Revenue 2011 Revenue $ % ------- -------- ------- -------- ------ ----- Embedded enablement $11,334 48.5% $10,471 48.4% $ 863 8.2% External enablement 6,755 28.9% 6,635 30.7% 120 1.8% Device management 5,275 22.6% 4,530 20.9% 745 16.4% ------- -------- ------- -------- ------ Net revenue $23,364 100.0% $21,636 100.0% $1,728 8.0% ======= ======== ======= ======== ====== Three Months Ended December 31, ---------------------------------- Change % of Net % of Net ------------ 2012 Revenue 2011 Revenue $ % ------- -------- ------- -------- ------ ----- Americas $ 6,852 56.3% $ 5,847 55.9% $1,005 17.2% EMEA 3,575 29.4% 2,933 28.1% 642 21.9% Asia Pacific 1,735 14.3% 1,672 16.0% 63 3.8% ------- -------- ------- -------- ------ Net revenue $12,162 100.0% $10,452 100.0% $1,710 16.4% ======= ======== ======= ======== ====== Six Months Ended December 31, ---------------------------------- Change % of Net % of Net ------------ 2012 Revenue 2011 Revenue $ % ------- -------- ------- -------- ------ ----- Americas $12,808 54.8% $11,524 53.3% $1,284 11.1% EMEA 6,652 28.5% 6,448 29.8% 204 3.2% Asia Pacific 3,904 16.7% 3,664 16.9% 240 6.6% ------- -------- ------- -------- ------ Net revenue $23,364 100.0% $21,636 100.0% $1,728 8.0% ======= ======== ======= ======== ====== Add to Digg Bookmark with del.icio.us Add to Newsvine Investor Relations Contacts: Lantronix, Inc. Jeremy Whitaker Chief Financial Officer (949) 453-3990 E.E. Wang Lukowski [email protected] 949-614-5879 Source: Lantronix, Inc. |