Lantronix Inc. (NASDAQ: LTRX), a global leader of compute and connectivity IoT solutions, today reported results for its fourth quarter of fiscal 2024.

Net revenue totaled $49.1 million, up 19 percent sequentially and up 41 percent year-over-year.

GAAP EPS of $0.01, compared to ($0.05) in the prior year and ($0.01) in the prior quarter.

Non-GAAP EPS of $0.15, compared to $0.06 in the prior year and $0.11 in the prior quarter.

Business Outlook

For the first fiscal quarter of 2025, the company expects revenue in a range of $34 million to $38 million and non-GAAP EPS of $0.07 to $0.11 per share.

Conference Call and Webcast

Management will host an investor conference call and audio webcast on Thursday, Sept.5, 2024, at 2:00 p.m. Pacific Time (5:00 p.m. Eastern Time) to discuss its results for the fourth quarter of fiscal 2024 that ended June 30, 2024. 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 Q4 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 Sept. 5, 2024, at the Lantronix website. A telephonic replay will also be available through Sept. 12, 2024, by dialing 1-877-344-7529 (US) or 1-412-317-0088 (international) or Canada toll-free at 1-855-669-9658 and entering passcode 3146069.

About Lantronix

Lantronix Inc. is a global leader 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 first fiscal quarter of 2025. 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 March 31, 2024, filed with the SEC on May 2, 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 Consolidated Balance Sheets
(In thousands, except share and par value data)
    June 30,   June 30,
     2024     2023 
         
Assets        
Current Assets:        
Cash and cash equivalents   $ 26,237     $ 13,452  
Accounts receivable, net     31,279       27,682  
Inventories, net     27,698       49,736  
Contract manufacturers' receivable     1,401       3,019  
Prepaid expenses and other current assets     2,335       2,662  
Total current assets     88,950       96,551  
         
Property and equipment, net     4,016       4,629  
Goodwill     27,824       27,824  
Intangible assets, net     5,251       10,565  
Lease right-of-use assets     9,567       11,583  
Other assets     600       472  
Total assets   $ 136,208     $ 151,624  
         
Liabilities and stockholders' equity        
Current Liabilities:        
Accounts payable   $ 10,347     $ 12,401  
Accrued payroll and related expenses     5,836       2,431  
Current portion of long-term debt, net     3,002       2,743  
Other current liabilities     10,971       28,813  
Total current liabilities     30,156       46,388  
Long-term debt, net     13,219       16,221  
Other non-current liabilities     11,478       11,459  
Total liabilities     54,853       74,068  
         
Commitments and contingencies        
         
Stockholders' equity:        
Preferred stock, $0.0001 par value; 5,000,000 shares authorized;        
none issued and outstanding     -       -  
Common stock, $0.0001 par value; 100,000,000 shares authorized;      
37,872,883 and 36,875,586 shares issued and outstanding at        
June 30, 2024 and 2023, respectively     4       4  
Additional paid-in capital     304,001       295,686  
Accumulated deficit     (223,021 )     (218,505 )
Accumulated other comprehensive income     371       371  
Total stockholders' equity     81,355       77,556  
Total liabilities and stockholders' equity   $ 136,208     $ 151,624  
         
LANTRONIX, INC.
Unaudited Consolidated Statements of Operations
(In thousands, except per share data)
                     
    Three Months Ended   Years Ended 
    June 30,   March 31,   June 30,   June 30,
     2024     2024     2023     2024     2023 
                     
Net revenue   $ 49,075     $ 41,183     $ 34,924     $ 160,327     $ 131,189  
Cost of revenue     30,353       24,679       21,126       95,973       74,925  
Gross profit     18,722       16,504       13,798       64,354       56,264  
Operating expenses:                    
Selling, general and administrative     11,059       9,753       8,032       40,206       36,948  
Research and development     5,265       5,186       4,948       20,282       19,625  
Restructuring, severance and related charges     523       350       29       1,423       693  
Acquisition-related costs     -       -       -       -       315  
Fair value remeasurement of earnout consideration     -       -       86       (9 )     (447 )
Amortization of intangible assets     1,310       1,310       1,464       5,314       5,804  
Total operating expenses     18,157       16,599       14,559       67,216       62,938  
Income (loss) from operations     565       (95 )     (761 )     (2,862 )     (6,674 )
Interest expense, net     (175 )     (171 )     (404 )     (916 )     (1,485 )
Other income (expense), net     9       2       (52 )     7       (73 )
Income (loss) before income taxes     399       (264 )     (1,217 )     (3,771 )     (8,232 )
Provision for income taxes     13       159       436       745       748  
Net income (loss)   $ 386     $ (423 )   $ (1,653 )   $ (4,516 )   $ (8,980 )
                     
Net income (loss) per share - basic   $ 0.01     $ (0.01 )   $ (0.05 )   $ (0.12 )   $ (0.25 )
Net income (loss) per share - diluted   $ 0.01     $ (0.01 )   $ (0.05 )   $ (0.12 )   $ (0.25 )
                     
Weighted-average common shares - basic     37,697       37,509       36,719       37,386       36,257  
Weighted-average common shares - diluted     38,096       37,509       36,719       37,386       36,257  
                     
LANTRONIX, INC.
Unaudited Reconciliation of Non-GAAP Adjustments
(In thousands)
    Three Months Ended    Years Ended
    June 30,   March 31,   June 30,    June 30,
     2024     2024     2023     2024     2023 
                     
GAAP net income (loss)   $ 386     $ (423 )   $ (1,653 )   $ (4,516 )   $ (8,980 )
Non-GAAP adjustments:                    
Cost of revenue:                    
Share-based compensation     66       66       (1 )     237       158  
Employer portion of withholding taxes on stock grants     1       1       -       7       13  
Amortization of manufacturing profit in acquired inventory     126       190       44       822       225  
Depreciation and amortization     124       144       102       463       466  
Total adjustment to costs of revenue     317       401       145       1,529       862  
Selling, general and administrative:                    
Share-based compensation     2,010       1,337       414       6,248       4,546  
Employer portion of withholding taxes on stock grants     19       21       14       87       181  
Depreciation and amortization     369       352       327       1,393       1,022  
Total adjustments to selling, general and administrative     2,398       1,710       755       7,728       5,749  
Research and development:                    
Share-based compensation     471       469       414       1,852       1,504  
Employer portion of withholding taxes on stock grants     4       9       5       31       34  
Depreciation and amortization     72       76       84       308       248  
Total adjustments to research and development     547       554       503       2,191       1,786  
Restructuring, severance and related charges     523       350       29       1,423       693  
Acquisition related costs     -       -       -       -       315  
Fair value remeasurement of earnout consideration     -       -       86       (9 )     (447 )
Amortization of purchased intangible assets     1,310       1,310       1,464       5,314       5,804  
Litigation settlement cost     115       -       -       115       330  
Total non-GAAP adjustments to operating expenses     4,893       3,924       2,837       16,762       14,230  
Interest expense, net     175       171       404       916       1,485  
Other expense (income), net     (9 )     (2 )     52       (7 )     73  
Provision for income taxes     13       159       436       745       748  
Total Non-GAAP adjustments     5,389       4,653       3,874       19,945       17,398  
Non-GAAP net income   $ 5,775     $ 4,230     $ 2,221     $ 15,429     $ 8,418  
                     
                     
Non-GAAP net income per share (diluted)   $ 0.15     $ 0.11     $ 0.06     $ 0.40     $ 0.23  
                     
                     
Denominator for GAAP net income (loss) per share (diluted)     38,096       37,509       36,719       37,386       36,257  
Non-GAAP adjustment     771       1,674       548       1,367       932  
Denominator for non-GAAP net income per share (diluted)     38,867       39,183       37,267       38,753       37,189  
                     
GAAP cost of revenue   $ 30,353     $ 24,679     $ 21,126     $ 95,973     $ 74,925  
Non-GAAP adjustments to cost of revenue     (317 )     (401 )     (145 )     (1,529 )     (862 )
Non-GAAP cost of revenue     30,036       24,278       20,981       94,444       74,063  
Non-GAAP gross profit   $ 19,039     $ 16,905     $ 13,943     $ 65,883     $ 57,126  
Non-GAAP gross margin     38.8 %     41.0 %     39.9 %     41.1 %     43.5 %
                     
LANTRONIX, INC.
Unaudited Net Revenues by Product Line and Region
(In thousands)
                   
                   
  Three Months Ended   Years Ended
  June 30, 2024   March 31, 2024   June 30, 2023   June 30, 2024   June 30, 2023
Embedded IoT Solutions $ 11,364   $ 12,452   $ 18,818   $ 46,953   $ 63,636
IoT System Solutions   35,603     26,789     13,928     104,450     57,496
Software & Services   2,108     1,942     2,178     8,924     10,057
  $ 49,075   $ 41,183   $ 34,924   $ 160,327   $ 131,189
                   
                   
  June 30, 2024   March 31, 2024   June 30, 2023   June 30, 2024   June 30, 2023
Americas $ 17,126   $ 17,543   $ 18,844   $ 78,203   $ 78,557
EMEA   26,194     18,354     6,800     64,025     23,286
APJ   5,755     5,286     9,280     18,099     29,346
  $ 49,075   $ 41,183   $ 34,924   $ 160,327   $ 131,189

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