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%
======= ======== ======= ======== ======
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Investor Relations Contacts: Lantronix, Inc. Jeremy
Whitaker Chief Financial Officer (949) 453-3990 E.E. Wang Lukowski
investors@lantronix.com 949-614-5879
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